Bitcoin price declined below important supports near $3,940 against the US Dollar. BTC might correct in the short term, but sellers are likely to protect gains above $3,940.
Bitcoin Price Analysis
After multiple failures near the $4,000 resistance, bitcoin price started a sharp decline against the US Dollar. The BTC/USD pair formed a swing high near $3,980 and later declined below the key $3,940 support area. Sellers gained control and the price even broke the $3,900 support level. The price traded to a new weekly low at $3,855 and settled well below the 100 hourly simple moving average. Later, the price started an upside correction above the $3,900 level.
The price cleared the 23.6% Fib retracement level of the recent decline from the $3,978 high to $3,855 low. However, the price is currently facing resistance near $3,920. It represents the 50% Fib retracement level of the recent decline from the $3,978 high to $3,855 low. In the short term, the price might correct above the $3,920 level. Having said that, there is a strong resistance near the $3,940 and $3,950 levels.
Besides, yesterday’s highlighted major bearish trend line is intact with resistance at $3,950 on the hourly chart of the BTC/USD pair. The 61.8% Fib retracement level of the recent decline from the $3,978 high to $3,855 low might also prevent gains near $3,930. Therefore, if the price corrects higher, it is likely to face a strong resistance near $3,940 and $3,950. A proper close above the $3,950 resistance plus the 100 hourly SMA is must for a decent rebound towards $4,000.
Looking at the chart, bitcoin price clearly moved into a bearish zone below the $3,940 support level. On the downside, an immediate support is at $3,880, below which the price is likely to revisit the $3,850 support. If there are more losses below $3,850, the next stop for sellers could be $3,800. On the upside, the main resistance is at $3,950, above which there are chances of a fresh increase.
Technical indicators:
Hourly MACD – The MACD moved back in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD recovered recently, but it is still well below the 50 level.
Major Support Levels – $3,880 followed by $3,850.
Major Resistance Levels – $3,930, $3,940 and $3,950.
