Bitcoin bears continued with the display of muscle strength on Wednesday, leading to losses under $40,000. The bellwether cryptocurrency plummeted to $35,000 before some semblance of stability returned to the market.
The losses were not unique to Bitcoin but affected most crypto assets. Over $500 billion was wiped off the cryptocurrency market led by altcoins such as Ethereum, Dogecoin, Binance Coin Polkadot, and Bitcoin Cash.
Bitcoin’s short-term outlook flips bullish
At the time of writing, Bitcoin trades marginally above $39,300. This price action follows a commendable recovery from $35,000. Bulls currently target trading above $40,000 and perhaps settling past $42,000.
The short-term technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) have vivid bullish signals. The former has ricocheted from the oversold areas and is heading fast toward the midline. This shows that buying activities dominate, with investors betting on recovery extending to higher levels.
The MACD also has a bullish impulse, reinforced by support established at -2,500. Moreover, this indicator follows an asset’s trend and measures its momentum. The MACD line (blue) crossing above the signal line will cement the bull’s presence in the market. Similarly, movement above the mean line (blue) would catapult Bitcoin toward $50,000 as the bullish camp solidifies the momentum.
BTC/USD four-hour chart
Although recovery is underway, Bitcoin needs to confirm a break above $40,000. Most investors remain skeptical of the recovery, afraid to end up in a bull trap. Price action past $42,000 will ensure that attention shifts from seeking support to gaining traction toward $50,000.
Bitcoin intraday levels
Spot rate: $39,300
Support: $38,000 and $35,000
Resistance: $42,000 and $46,000