Bitcoin Pulls Back As Traders Take Profits After Rally
Resistance At $40,000 Stays Strong
Bitcoin failed to settle above the resistance at $40,000 and pulled back towards $37,000 as traders took some profits off the table after a major rally which took the world’s leading cryptocurrency from $30,000 to $40,000 in just six trading sessions.
At this point, it looks that the short squeeze is over, and Bitcoin will need additional upside catalysts to settle above the key resistance at $40,000. While the recent upside move was spectacular, Bitcoin will need to settle above the resistance at $40,000 to have a chance to develop sustainable upside momentum.
Bitcoin faced significant resistance near $40,000 and pulled back below $38,000. The nearest support level for Bitcoin is located at $36,000. In case Bitcoin manages to settle below this level, it will head towards the next support level near the 20 EMA at $35,000. RSI is in the moderate territory, and there is plenty of room to gain downside momentum after the major upside move.
In case Bitcoin declines below $35,000, it will head towards the next support at $34,000. A successful test of this level will open the way to the test of the support at $32,000.
On the upside, Bitcoin needs to settle back above $38,000 to have a chance to get to the test of the major resistance level at $40,000. If Bitcoin gets above this level, it will head towards the highs of the previous upside move at $41,300.
From a big picture point of view, Bitcoin continues to trade in a wide trading range between the support at $30,000 and the resistance at $40,000. Both levels look strong, and Bitcoin will need additional catalysts to gain momentum and get out of this trading range.
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