TECHNICAL ANALYSIS: Bitcoin Breaks Key Support, Why BTC Could Revisit $40K

Bitcoin price failed to stay above the key $45,000 support zone against the US Dollar. BTC is showing a few bearish signs and it could correct lower to $40k.

Bitcoin extended its decline below the $45,500 and $45,000 support levels.

• The price is now trading below $46,000 and the 100 hourly simple moving average.
• There is a key bearish trend line forming with resistance near $45,800 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair could recover losses, but upsides might be limited above $45,500.

Bitcoin Price Dips Further

Bitcoin price started a fresh decline after it failed to clear the $48,000 resistance zone. BTC broke the $46,500 support zone to move into a short-term bearish zone.

It is consolidating above $45,500 for some time, but the bears finally took control. As a result, there was a push below the $45,000 support and the 100 hourly simple moving average. Bitcoin even spiked below $44,500 and traded as low as $44,258.

It is now consolidating losses above the $44,500 level. There was a break above the 23.6% Fib retracement level of the recent decline from the $47,203 swing high to $44,258 low.

On the upside, an immediate resistance is near the $45,000 level. The first key resistance is near the $45,700 level (the recent breakdown zone). There is also a key bearish trend line forming with resistance near $45,800 on the hourly chart of the BTC/USD pair.

The trend line coincides with the 50% Fib retracement level of the recent decline from the $47,203 swing high to $44,258 low. If bitcoin clears the $45,700 and $45,800 resistance levels, it could recover towards the $47,000 level in the near term.

More Losses in BTC?

If bitcoin fails to climb above the $45,700 and $45,800 resistance levels, it could extend its decline. An initial support on the downside is near the $44,500 level.

The first major support is now near the $44,200 zone. The next main support is now near the $43,800 level. If the price fails to stay above the $43,800 support, it could move down towards the $40,000 support level.