Bitcoin’s Close Below $38K Will Spark A Bigger Correction

Bitcoin’s close below $38K will likely spark a bigger correction as the price already started correcting to the downside from the $41,000 zone against the US dollar. BTC is struggling to stay above the $38,000 and will likely drop lower as we are reading more in our latest Bitcoin news.

Bitcoin failed to stay above the $40,000 pivot level and started a fresh decline with the price struggling to stay above $38,000 and the 100 hourly simple moving average. There was also a slight break below the bullish trend line of $38,550 on the hourly chart of the pair with it continuing lower unless there’s a strong move above the $39,200 level. After trading above the $40K level, Bitcoin’s price failed to extend the gains while BTC traded close to $41,000 and started a fresh decline with a  break below the $40K and the $39,200 support levels.

The price spiked below the $38,600 support level and the 100 hourly simple moving average with a  break below the key bullish trend line with support at $38,550 on the hourly chart of the pair. A new low was formed near the $37,400 level and the price is now recovering while correcting above the 50% fib retracement level from the $39,778 swing high to $37,403 low. It is now struggling to stay above the $38,000 and the 100 hourly simple moving average.

There’s also a connecting bearish trend line that formed with the resistance of $38,880 on the same charts with the trend line closing to 61.8% fib retracement level recent decline from the $39,778 high to $37,403 low. If there’s an upside break above the trend line resistance, the price could start a strong recovery to $40K and the price could resume its slide below $38,000. The next key support is close to the $37,400 level below which the price will drop to the $36K support zone.

If BTC manages to stay above the $38,000 it could go on a fresh increase and the initial resistance will be near the $38,800 zone with the bearish trend line remaining here. The clear break above the trend line resistance and will follow up another move of $39,200 that could start a steady increase in the coming sessions. The hourly MACD is gaining momentum in the bearish zone with the hourly RSI for the pair now being below the 50 level. The major support levels are set at $38K and the major resistance level is set at $38K.