Bitcoin recently broke below $40k, and it was clear that a move above that level won’t be easy. It tried to cross $39,500 twice in less than 12 hours, but bears took over, and Bitcoin broke below $37k. The downtrend that was forming is also playing out, giving resistance to the movement of Bitcoin. So, as Bitcoin correction continues, we might now need to look at lower levels that could be the local bottom.
Bitcoin breaking down
At present, Bitcoin is trading at $36.7k, which is important support. The price did go below $36.4k but since then has been trading above this level. Now, it could be possible that the bulls form support here, and we test higher levels again. On uptrend, the first resistance will be near $37.5k, and then $38k, which was first support now turned resistance. In case bulls are able to break through these levels, we will be looking at $39.5k and $40k as the next resistances, which are likely to be the most difficult to clear.
The bearish trendline forming puts another resistance around $38,5k-$39k, depending on how the price plays out. With this trendline, we could very well move to an even lower level like $35k. So, it is essential that the resistance is broken and turned into support again. The bull market can only resume if the price of Bitcoin stays above $40k.
A good thing, though, is the RSI that has been corrected and could soon bottom out. That might signify the local bottom, and we might start seeing a move up again. Seeing a little ahead in the charts, the most important resistance in near time is the 100-day EMA which is near $44.5k, which Bitcoin was unable to clear and crashed below $40k.
Bear market?
Many analysts are predicting that we might have entered a bear market, and it could very well be possible. The only problem is that long-term hodlers aren’t selling, which is one of the primary signals of a bear market. So, there is no point in being completely bearish or bullish right now. If you are a trader, do your TA and take trades and if you are an investor, then buy the dip and hold.
What are your thoughts as the Bitcoin correction continues on being unable to clear $39.5k? And do you think that we are in a bear market? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Intel unveils 1st gen Bitcoin mining chip called Bonanza Mine BMZ1.
