Bitcoin Shows Recovery Signs and Could Rally Above $40K
Bitcoin is correcting losses and trading above $39,000 against the US Dollar. BTC could gain bullish momentum if it clears the $40,000 resistance zone.
- Bitcoin is slowly recovering and trading above the $39,000 zone.
- The price is trading above $39,200 and the 100 hourly simple moving average.
- There was a break above a major bearish trend line with resistance near $38,980 on the hourly chart of the BTC/USD pair (data feed from Kraken).
- The pair might accelerate higher and could even surpass the $40,000 resistance zone.
Bitcoin Price Starts Correction
Bitcoin price extended decline below the $38,000 support zone. However, BTC found support near the $37,150 zone and started a decent recovery wave.
A low was formed near $37,159 before the price corrected higher. There was a move above the $38,000 and $38,500 resistance levels. The price was able to climb above the 76.4% Fib retracement level of the downward move from the $39,545 swing high to $37,159 low.
Besides, there was a break above a major bearish trend line with resistance near $38,980 on the hourly chart of the BTC/USD pair. Bitcoin is now trading above $39,200 and the 100 hourly simple moving average.
On the upside, an immediate resistance is near the $39,545 swing high. The next major resistance is near the $40,000 level. If there is a clear move above the $40,000 resistance zone, the price might accelerate higher. In the stated case, the price could rise towards the $41,000 zone.
Source: BTCUSD on TradingView.com
The 1.618 Fib extension level of the downward move from the $39,545 swing high to $37,159 low is also near the $41,000 level. Any more gains might send the price towards the $42,200 level.
Another Rejection in BTC?
If bitcoin fails to clear the $40,000 resistance zone, it could start another decline. An immediate support on the downside is near the $39,150 zone.
The next major support is seen near the $38,800 level and the 100 hourly simple moving average. If there is a downside break below the $38,800 support, the price might gain bearish momentum. In the stated case, there is a risk of a move towards the $37,500 level.
Hourly MACD – The MACD is now gaining pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.
Major Support Levels – $39,150, followed by $38,800.
Major Resistance Levels – $39,545, $40,000 and $41,000.