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.

Shakira

I’m a professional writer specializing in the field of cryptocurrencies. My work has been published in numerous online and offline publications which has made me one of the leading authorities in this industry. In addition to my work as an author, I’m also a highly sought-after speaker on the topic of cryptocurrency investing. I have given talks at some of the world’s most prestigious financial institutions, and my advice is regularly featured in the media.