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

Bitcoin started a fresh decline from well above the $44,000 level against the US Dollar. BTC broke the $42,500 support and remains at a risk of more downsides.

• Bitcoin traded below an important support zone at $42,500.
• The price is trading below $42,500 and the 100 hourly simple moving average.
• There is a key bearish trend line forming with resistance near $42,200 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could decline further if it fails to recover above the $42,800 zone.

Bitcoin Price Extends Decline

Bitcoin price failed to clear the $45,500 resistance and started a major decline. BTC traded below the $43,200 and USD 42,500 support levels to move into a short-term bearish zone.

There was also a close below the $42,50 level and the 100 hourly simple moving average. A low was formed near $41,573 and the price is now consolidating losses. An immediate resistance is near the $42,000 level. The first major resistance is near the $42,200 level.

Besides, there is also a key bearish trend line forming with resistance near $42,200 on the hourly chart of the BTC/USD pair. The next key resistance could be $42,500 or the 23.6% Fib retracement level of the recent decline from the $45,900 high to $41,573 low.

Source: BTCUSD on TradingView.com

The main resistance seems to be forming near the $42,850 level or the 100 hourly simple moving average. A clear move above the 100 hourly simple moving average might send the price to $43,750. It is near the 50% Fib retracement level of the recent decline from the $45,900 high to $41,573 low.

More Losses in BTC?

If bitcoin fails to start a fresh increase above $42,850, it could continue to move down. An immediate support on the downside is near the $41,600 zone.

The next major support is seen near the $41,200 level. If there is a downside break below the $41,200 support, the price could start a major decline towards the $40,000 level.

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 50 level.

Major Support Levels – $41,600, followed by $41,200.

Major Resistance Levels – $42,200, $42,850 and $43,000.