Bitcoin started a major increase above the $40,000 resistance against the US Dollar. BTC might correct lower, but downsides could be limited below $40,000.
Bitcoin was able to clear the $40,000 resistance and entered a positive zone.
The price is trading above $40,500 and the 100 hourly simple moving average.
There is a key bullish trend line forming with support near $39,250 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair might correct lower, but there is a key support forming near the $40,000 zone.
Bitcoin Price Rallies 5%
Bitcoin price formed a base above the $38,000 level. BTC started a steady increase above the $39,550 resistance level and the 100 hourly simple moving average.
It opened the doors for a move above the $40,000 resistance. The bulls took control and were able to push the price above the $41,000 resistance zone. The price gained over 5% and there was a move towards $41,800. A high is formed near $41,706 and the price is now correcting gains.
It traded below the $41,000 level. There was a test of the 23.6% Fib retracement level of the recent wave from the $38,170 swing low to $41,706 high.
On the downside, there are many support levels forming near $40,000. There is also a key bullish trend line forming with support near $39,250 on the hourly chart of the BTC/USD pair. On the upside, bitcoin might face resistance near the $41,200 level.
The next major resistance could be near the recent high or $41,800. A clear move above the $41,800 level could even push the price above the $42,000 resistance. In the stated case, the price might rise towards the $43,200 level.
Dips Limited in BTC?
If bitcoin fails to clear the $41,200 resistance zone, it could start a downside correction. An immediate support on the downside is near the $40,500 zone.
The next major support is seen near the $40,000 level. It is near the 50% Fib retracement level of the recent wave from the $38,170 swing low to $41,706 high. The main support now sits near the trend line and $39,000.
Technical indicators:
Hourly MACD – The MACD is now losing pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is well above the 50 level.
Major Support Levels – $40,500, followed by $40,000.
Major Resistance Levels – $41,200, $41,800 and $42,000.
