Bitcoin rejection from June highs of $41,300 results in declines to $37,000. The 100 SMA secures the downside as bulls battle the seller congestion zone at $38,000.
Bitcoin bulls have had a challenging time this week, trying to sustain the price above $40,000. Unfortunately, the upswing from the primary support at $31,000 hit a massive barrier at $41,300, sabotaging the uptrend.
Sellers took advantage of the weakening bullish camp to reverse the gears. As a result, Bitcoin price slipped below $40,000 and has stretched the bearish leg to $37,000, perhaps to close the recent CME BTC futures gap.
In the meantime, the flagship cryptocurrency trades at $37,850 amid a growing bearish momentum. Realize that the 200 Simple Moving Average (SMA) and the 50 SMA reinforce the barrier at $38,000, hinting at delayed or undermined recovery to $40,000.
The short-term technical picture is highly bearish based on tools such as the Moving Average Convergence Divergence (MACD) indicator and the Relative Strength Index (RSI). The former has a vivid bearish outlook presented as the MACD slides to the zero line amid a possible cross into the negative territory. Moreover, after the MACD line crosses below the signal line, it increases the divergence, emphasizing the bearish signal.
At the same time, the RSI shines a light on the growing bearish grip after dropping from the overbought region. Currently, the momentum indicator seeks support at 40 but points toward the oversold territory, insinuating a possible price drop to $36,000 and $34,400, respectively.
Note that two regions will characterize Bitcoin’s trading on Friday; action above $38,000 may validate the uptrend to $40,000 while sliding beneath the 100 SMA at $37,000 could trigger massive losses to $36,000, which may extend to $34,000.
Spot rate: $37,850 Trend: bearish Volatility: Growing
Resistance: $38,000 and $40,000. Support: $36,000 and $34,000