Bitcoin did not manage to settle above the key resistance level at $40,000.
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.
Other cryptocurrencies are also moving lower after major upside moves. Ethereum is currently trying to settle below $2,000 while Dogecoin is testing the support level at $0.20.
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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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.