Why Bitcoin Price Remains At Risk of A Fresh Drop To $36K

By Aayush Jindal - February 7, 2021 in BTC Reading Time: 2min read

Photo courtesy of shutterstock.com

Bitcoin price surged above the $0,000 level before started a downside correction against the US Dollar. BTC is now testing a major support at $38,600, below which it could decline to $36,000.

• Bitcoin climbed above the $38,000 resistance, but it struggled to stay above $40,000.
• The price is trading near the $38,600 support, but it is well above the 100 simple moving average (4-hours).
• There is a key bullish trend line forming with support near $38,650 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
• The pair could either decline heavily towards $36,000 or it might climb back above $40,000.

Bitcoin Price Remains At Risk

This past week, bitcoin price saw a decent upward move above the $36,000 resistance against the US Dollar. The BTC/USD pair even climbed above the $38,000 resistance to move further into a positive zone.

The price broke the $40,000 resistance and it settled above the 100 simple moving average (4-hours). A high was formed near $41,050 before the price started a downside correction. There was a break below the $39,500 and $39,000 levels.

The price even traded below the 23.6% Fib retracement level of the upward move from the $36,217 swing low to $41,050 high. Bitcoin is now trading near the $38,600 support level.

Source: BTCUSD on TradingView.com

There is also a key bullish trend line forming with support near $38,650 on the 4-hours chart of the BTC/USD pair. The 50% Fib retracement level of the upward move from the $36,217 swing low to $41,050 high is also near the trend line to provide support.

A downside break below the trend line support could open the doors for a larger decline below $37,000. The next major support is near the $36,000 level.

Fresh Increase in BTC?

If bitcoin stays above the trend line support, there are chances of a fresh increase above $39,500. An initial resistance on the upside is near the $40,000 level.

A proper break and close above the $40,000 resistance will most likely set the pace for a sustained upward move in the coming sessions. The next major resistance on the upside is near the $41,500 level.

Technical indicators

4 hours MACD – The MACD for BTC/USD is slowly gaining momentum in the bearish zone.

4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is still above the 50 level.

Major Support Level – $38,600

Major Resistance Level – $40,000

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The original article was written by Aayush Jindal and posted on NewsBTC.com.

Article reposted on Markethive by Jeffrey Sloe