The fallout from the three-month-old rising channel teases further correction in Bitcoin(BTC) price. A successful retest to the breach resistance trendline has plunged the coin price below the $40000 support. However, a positive divergence in the RSI chart raises doubt about a genuine breakdown.
Key points:
- The BTC price gives a double bottom breakdown from a $40000 neckline
- The intraday trading volume in the Bitcoin is $16.6 Billion, indicating a 12.5% lost
Source-Tradingview
Over the past three months, the Bitcoin(BTC) price resonated in an ascending channel of an inverted flag pattern. However, this price pattern could be quite deceiving as it violates some important horizontal resistance levels without a genuine follow-up.
The BTC price witnessed this activity with a $45000 fakeout on April 6th, which triggered a significant sell-off. The sellers continued to pressurize the coin price and gave a massive breakdown from the inverted flag pattern on April 11th.
Followed by nearly two weeks of retest phase, the BTC price has tested the flipped resistance trendline twice. These reversals suggest the traders are selling on higher levels, resulting in a $40000 breakdown.
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By the press time, the BTC price trades at $39576, with an intraday gain of 0.34%. Therefore, the selling momentum would eventually escalate if sellers sustain the coin price below $40000, teasing a revisit to $36400 support, followed by a January low of $33000.
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Alternatively, the $40000 breakdown was not so significant, and therefore a jump above $40000 remains on the cards.
Technical indicator-
EMAs: A recent bearish crossover of 20-and-50-day EMA regains a bearish alignment among the crucial EMAs(20,50, 100, and 200). Moreover, these EMAs declining steadily suggests the sellers are in control.
RSI indicator: The RSI slope sustains below the neutral zone during retest suggests the traders maintain a bearish sentiment. Moreover, a recent breakdown below the 14-SMA may bolster the $40000 support breakdown.
- Resistance level- $40000, $42365
- Support level- $36400, $33000
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