Bitcoin is in more turmoil after losing ground above $45,000 and extending the losses below last week’s formidable support at $42,000. The pioneer cryptocurrency downtrend seems unstoppable from a short-term technical analysis perspective. Therefore, the ‘saving grace’ could be the 200 Simple Moving Average (SMA) on the daily chart.
Bitcoin barely holds onto $40,000
Following the freefall from price levels marginally above $45,000, the bellwether cryptocurrency extended the bearish action under $40,000 before embracing the support provided at the 200 SMA on the daily chart.
Defending this vital support remains crucial to avoiding a colossal downtrend. The last time the 200 SMA was lost as support was in March 2020, when Bitcoin flashed dropped to $3,800.
Meanwhile, BTC trades at $40,650 at the time of writing. The path with the least resistance seems downward based on the applied short-term technical indicators. With the Relative Strength Index (RSI) into the oversold region with no signs of recovery, BTC is bound to stretch the bearish leg further down.
BTC/USD daily chart
The Moving Average Convergence Divergence (MACD) crowns the bearish outlook as observed on the chart. For example, the indicator slipped under the mean line (0.00) and is currently exploring how far the rabbit hole goes in the negative area. Similarly, the extent of the MACD divergence from the signal line has not been since the breakdown in March 2020.
It is probable to say that Bitcoin’s downtrend is unstoppable at the moment unless the 200 SMA emerges as a robust anchor. Therefore, investors should wait for a real break above $40,000 to go all-in on BTC and anticipate recovery toward $50,000.
Bitcoin intraday levels
Spot rate: $40,650
Support: 200 SMA
Resistance: $42,000 and $45,000.