TA: Bitcoin Nosedives To $28.5K, Why Important Support Turned Resistance

Bitcoin Corrects Gains, Why BTC Must Could Extend Losses

Bitcoin price started a downside correction from the $42,600 zone against the US Dollar. BTC is now trading below $40,000 and it might extend losses towards $38,500.

Bitcoin started a downside correction below the $41,200 and $40,000 support levels.
The price is now trading below $40,000 and the 100 hourly simple moving average.
There is a key bearish trend line forming with resistance near $40,500 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair is likely to continue lower towards the $38,500 support zone in the near term.

Bitcoin Price Back Below $40K
Bitcoin price extended its increase above the $42,000 resistance level. BTC even climbed above the $42,500 resistance level and settled above the 100 hourly simple moving average.
However, the price struggled above the $42,600 level. A high was formed near $42,629 before the price started a downside correction. There was a break below the $41,200 and $40,500 support levels. It even broke the $40,000 support level and the 100 hourly simple moving average.
A low is formed near $39,281 and the price is now consolidating. An immediate resistance on the upside is near the $40,000 level. It is near the 23.6% Fib retracement level of the downward move from the $42,629 swing high to $39,281 low.
The first major resistance is near the $40,500 level and the 100 hourly simple moving average. There is also a key bearish trend line forming with resistance near $40,500 on the hourly chart of the BTC/USD pair.

Source: BTCUSD on TradingView.com
The trend line is close to the 50% Fib retracement level of the downward move from the $42,629 swing high to $39,281 low. If there is an upside break above the trend line, bitcoin could rise towards $41,200. The next major resistance on the upside is near the $42,000 zone.
More Losses in BTC?
If bitcoin fails to climb above the $40,000 and $40,500 resistance levels, it could continue to move down. An initial support on the downside is near the $39,200 level.
The first major support is now near the $38,500 zone. A clear downside break below the $38,500 support might call for more losses. The next major support is near the $37,000 zone.
Technical indicators:
Hourly MACD – The MACD is slowly gaining pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 30 level.
Major Support Levels – $38,500, followed by $37,000.
Major Resistance Levels – $40,000, $40,500 and $42,000.

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