Bitcoin Price Holds Key Support, Can Bulls Overcome This Key Hurdle?

Bitcoin price dived again and retested the $40,000 support zone. BTC is rising, but it must clear $42,350 to move into a positive zone.

• Bitcoin is attempting a fresh increase from the $40,000 support zone.
• The price is trading below $43,600 and the 100 hourly Simple moving average.
• There was a break above a connecting bearish trend line with resistance near $41,300 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could gain bullish momentum once it clears the $42,350 resistance zone.

Bitcoin price dropped heavily below the $43,500 and $43,200 support levels. BTC even dived below the $41,200 support before the bulls emerged. A low was formed near $39,999 and the price is now attempting a fresh increase.

The price climbed above the 23.6% Fib retracement level of the downward move from the $44,699 swing high to the $39,999 low. Besides, there was a break above a connecting bearish trend line with resistance near $41,300 on the hourly chart of the BTC/USD pair.

However, Bitcoin is still trading below $43,600 and the 100 hourly Simple moving average. On the upside, immediate resistance is near the $42,000 level. The first major resistance is forming near $42,350. It is near the 50% Fib retracement level of the downward move from the $44,699 swing high to the $39,999 low.

Source: BTCUSD on TradingView.com

A close above the $42,350 resistance might start a steady increase. The next key resistance could be near $43,000, above which BTC could rise toward the $44,000 level. A clear move above the $44,000 level could set the pace for a test of $45,000.

If Bitcoin fails to rise above the $42,350 resistance zone, it could start another decline. Immediate support on the downside is near the $41,200 level.

The next major support is near $40,550, below which the price might test the $40,000 zone. If there is a move below $40,000, there is a risk of a sharp decline. In the stated case, the price could drop toward the $38,500 support in the near term.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below the 30 level.

Major Support Levels – $41,200, followed by $40,000.

Major Resistance Levels – $42,400, $43,200, and $44,200.