Bitcoin recently tested support at $33,500 following another rejection from $40,000. The largest cryptocurrency by market capitalization has lost more than half of its value from the all-time high of $65,000 in May. As the new month begins, investors hope that BTC will turn a new leaf and gain a significant amount of the lost ground.
However, recovery toward $40,000 appears to have stalled at $37,000. A couple of levels are challenging the bulls at this level; the 50 Simple Moving Average (SMA) and the triangle’s hypotenuse.
Bitcoin upside price action in danger
The descending triangle is a highly bearish pattern because it usually marks the beginning or continuation of a downtrend. Although, there are instances when the triangle results in a bullish impulse.
A comprehensive look at the four-hour chart shows failed attempts to break above the hypotenuse. Thus, selling pressure is bound to increase, especially if Bitcoin closes the day beneath the 50 SMA.
It is essential to realize that the descending triangle pattern gives a bearish signal. Therefore, if overhead pressure increases and the price slices through the x-axis support, the bellwether cryptocurrency could be in for another massive drop to $24,000.
BTC/USD four-hour chart
The short-term bearish outlook has been validated by the Relative Strength Index (RSI). This trend strength indicator shows that sellers gradually gain ground against the buyers. If the movement continues under the midline toward the oversold, Bitcoin’s downtrend would have increased momentum, risking the 29% drop.
On the other hand, the Moving Average Convergence Divergence (MACD) has a bullish signal. Hence, holding above the 50 SMA or the hurdle at $37,000 could allow bulls to focus on gains above $40,000.
Bitcoin intraday levels
Spot rate: $36,612
Support: $36,000 and $33,500
Resistance: $37,000 and $40,000