TA: Bitcoin Breaks Key Support, Here’s Why BTC Could Dive Below $40K

Bitcoin price failed to stay above the key $42,150 support zone against the US Dollar. BTC is declining and it remains at a risk of a sharp decline below $40K.

• Bitcoin failed to stay above the main $42,000 and $42,150 support levels.
• The price is now trading well below $45,000 and the 100 hourly simple moving average.
• There is a new major bearish trend line forming with resistance near $44,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair is likely to continue lower below the $40,000 support levels in the near term.

Bitcoin Price Breaks Double Bottom

Bitcoin started a decent recovery from the $42,000 and $42,150 support levels. However, the bulls failed to push the price above the $46,000 resistance zone.

As a result, the price started a fresh decline below the $44,000 level. The bears were able to push the price below the main $42,000 and $42,150 support levels (double bottom zone). It is now trading well below $45,000 and the 100 hourly simple moving average.

Bitcoin tested the $40,500 support zone and it is showing a lot of bearish signs. An initial resistance is near the $41,800 zone. It is near the 23.6% Fib retracement level of the recent decline from the $45,774 high to $40,472 low.

There is also a new major bearish trend line forming with resistance near $44,000 on the hourly chart of the BTC/USD pair. An intermediate resistance is near the $43,200 zone. It is close to the 50% Fib retracement level of the recent decline from the $45,774 high to $40,472 low.

Source: BTCUSD on TradingView.com

A successful close above the $43,200 and $44,000 levels could open the doors for a decent recovery in the coming sessions. The next major resistance sits near the $46,000 level.

More Losses in BTC?

If bitcoin fails to clear the $43,200 and $44,000 resistance levels, there is a risk of more losses. An initial support on the downside is near the $40,500 level.

The main support is now forming near the $40,000 zone. A downside break below the recent low and $40,000 could spark another sharp decline in the near term. The next key support could be $36,500.

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 well below the 30 level.

Major Support Levels – $40,500, followed by $40,000.

Major Resistance Levels – $42,000, $43,200 and $44,000.