Bitcoin Corrects Gains, Why Dips Could be Attractive In Short-term

Bitcoin rallied above the $42,000 resistance zone against the US Dollar. BTC is correcting gains, but it might find support near the $40,000 zone.

• Bitcoin extended rally and even traded above the $42,000 resistance zone.
• The price is trading above $40,000 and the 100 hourly simple moving average.
• There is a key bullish trend line forming with support near $40,250 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair might start a fresh increase unless there is a close below the 39,500 support zone.

Bitcoin Price Dips

Bitcoin price remained well bid above the $40,000 support zone. BTC extended rally and climbed above the $42,000 resistance zone.

The price even spiked above the $42,500 level and settled above the 100 hourly simple moving average. A high was formed near $42,547 before the price started a downside correction. There was a minor decline below the $41,650 support level.

Bitcoin traded below the 23.6% Fib retracement level of the upward move from the $37,160 swing low to $42,547 high. It is now consolidating near the $40,800 level. There is also a key bullish trend line forming with support near $40,250 on the hourly chart of the BTC/USD pair.

On the upside, an immediate resistance is near the $41,250 level. The next major resistance is near the $42,000 level. If there is a clear move above the $42,000 resistance zone, the price might gain bullish momentum. In the stated case, the price could rise towards the $42,500 zone.

Source: BTCUSD on TradingView.com

If the bulls remain in action, they might attempt a new weekly high above the $42,500 zone. The next major resistance sits near the $43,200 level.

More Losses in BTC?

If bitcoin fails to clear the $41,650 resistance zone, it could continue to move down. An immediate support on the downside is near the $40,500 zone.

The next major support is seen near the $40,250 level and the trend line. The main support sits near the $40,000 zone or the 50% Fib retracement level of the upward move from the $37,160 swing low to $42,547 high. If there is a downside break below the $39,500 support, the price might gain bearish momentum.

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 now below the 50 level.

Major Support Levels – $40,250, followed by $39,500.

Major Resistance Levels – $41,250, $41,650 and $42,500.