Bitcoin Resumes Decline, Here’s Why BTC Could Dive To New Monthly Low

Bitcoin Resumes Decline, Here’s Why BTC Could Dive To New Monthly Low

Bitcoin price is showing bearish signs and trading well below $40,000 against the US Dollar. BTC is likely to extend losses below $34,000 and $32,000 in the near term.

• Bitcoin failed to settle above $40,000 and it started a fresh decline below $38,000.
• The price is now trading well below $40,000 and the 100 simple moving average (4-hours).
• There is a major bearish trend line forming with resistance near $37,500 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
• The pair is likely to continue lower as long as it is trading below $38,000 and $40,000.

Bitcoin Price Turns Red

This past week, bitcoin price started a decent recovery above the $35,000 level against the US Dollar. The BTC/USD pair even broke the $38,000 resistance level.

However, the price failed to settle above the $40,000 level and it remained well below the 100 simple moving average (4-hours). A high was formed near $40,971 and the price started a fresh decline. There was a break below the $38,000 support level.

Bitcoin traded below the 50% Fib retracement level of the upward move from the $31,296 swing low to $40,971 high. There is also a major bearish trend line forming with resistance near $37,500 on the 4-hours chart of the BTC/USD pair.

Source: BTCUSD on TradingView.com

The pair is now testing the 76.4% Fib retracement level of the upward move from the $31,296 swing low to $40,971 high. If there is a downside break below the $34,000 and $33,500 support levels, the price is likely to accelerate lower.

The next major support is near the $31,250 level, below which the price may possibly test the $30,000 support level in the near term.

Upsides Limited in BTC?

If bitcoin remains stable above the $33,500 level, it could start a fresh increase. An initial resistance on the upside is near the $36,500 level.

The first major resistance is near the trend line and $38,000. The main resistance is now near $40,000. A close above $40,000 is must to start a steady increase in the near term. The next key barrier could be $45,000.

Technical indicators

4 hours MACD – The MACD for BTC/USD is gaining momentum in the bearish zone.

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

Major Support Level – $33,500

Major Resistance Level – $38,000