The repercussions of the three-month-old rising channel suggest that the price of Bitcoin (BTC) will continue to fall. The coin price has fallen below the $40000 support after a successful retest of the breach resistance trendline. A positive divergence in the RSI chart, on the other hand, casts doubt on a genuine breakdown.
The Bitcoin (BTC) price has been resonating in an ascending channel of an inverted flag pattern for the past three months. This price pattern, however, may be deceptive because it violates some important horizontal resistance levels without a genuine follow-up.
On April 6th, the BTC price witnessed this activity with a $45000 fakeout, which triggered a significant sell-off. On April 11th, the sellers continued to pressurize the coin price, resulting in a massive breakdown from the inverted flag pattern.
The BTC price has tested the flipped resistance trendline twice, after nearly two weeks of retesting. These reversals indicate that traders are selling at higher levels, leading to a $40000 breakdown.
By the time this article is published, the BTC price is $39576, up 0.34 percent on the day. As a result, if sellers keep the coin price below $40000, the selling momentum will build, teasing a return to $36400 support, followed by a January low of $33000.
Alternatively, the $40000 breakdown was not as significant, and thus a move above $40000 remains possible.
EMAs are a technical indicator. A recent bearish crossover of the 20- and 50-day EMAs re-establishes a bearish alignment among the key EMAs (20,50, 100, and 200). Furthermore, the fact that these EMAs are steadily declining suggests that the sellers are in command.
RSI indicator: If the RSI slope remains below the neutral zone during the retest, it indicates that traders are still bearish. Furthermore, a recent break below the 14-SMA may bolster the $40000 support level.
$40000, $42365 are the resistance levels.
Levels of support: $36400, $33000