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Why Bitcoin Must Close Above $40K For Trend Reversal

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Bitcoin is struggling to clear the $40,000 resistance zone against the US Dollar. BTC must settle above $40,000 to start a steady upward move.

  • Bitcoin struggled to clear the $40,000 resistance zone and corrected lower.
  • The price is trading below $39,000 and the 100 hourly simple moving average.
  • There was a break below a short-term contracting triangle with support near $38,800 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could start a major increase if there is a close above the $40,000 resistance zone.

Bitcoin Price Faces Key Resistance

Bitcoin price remained in a positive zone above the $38,00 pivot level. BTC even broke the $39,500 resistance level. The bulls made a couple of attempts to clear the $40,000 resistance zone, but they failed.

The recent swing high was formed near $39,888 before there was a downside correction. There was a move below the $39,000 and $38,800 support levels. Besides, there was a break below a short-term contracting triangle with support near $38,800 on the hourly chart of the BTC/USD pair.

The pair is now trading below $39,000 and the 100 hourly simple moving average. A low is formed near $37,028 and the price is consolidating losses.

On the upside, an immediate resistance is near the $38,200 level and the 100 hourly SMA. The next key resistance is near the $38,500 level. It is near the 50% Fib retracement level of the downward move from the $39,888 swing high to $37,028 low.

Bitcoin Price

Source: BTCUSD on TradingView.com

The main resistance is now near the $38,800 level. It is close to the 61.8% Fib retracement level of the downward move from the $39,888 swing high to $37,028 low. A clear move above the $38,800 resistance could send the price further higher. In the stated case, it could even attempt a clear move above $40,000.

Dips Limited in BTC?

If bitcoin fails to clear the $38,800 resistance zone, it could start a downside correction. An immediate support on the downside is near the $37,200 zone.

The next major support is seen near the $36,400 level. If there is a downside break below the $36,400 support, the price might gain bearish momentum towards $35,000.

Technical indicators:

Hourly MACD – The MACD is now losing pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 50 level.

Major Support Levels – $37,200, followed by $36,400.

Major Resistance Levels – $38,200, $38,800 and $40,000.

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