Bitcoin short uptrend could reverse down back because of the $40 resistance level that won't open the door for the bitcoin price to surge.
Bitcoin completed a potential recovery after Monday 10% pullback and is now retesting the $40k resistance level, Bitcoin right now at the price of $40 looks overbought which could trigger some profit taking from whales after a near 25% rally over the past week.
If the Bitcoin price starts to go down the next support is around the $34k-$36k range, which is the middle of a two-month range.
The RSI which is the relative strength index on the four hour chat is declining from a overbought reading on Monday. A lower high on the RSI shows a bearish divergence, which will delay bitcoin’s short-term uptrend.
The intermediate-term trend is improving with a notable loss of downside momentum over the past few weeks. Buyers will probably remain active at lower support levels, although a breakout above $40,009 is needed right to resume the long-term uptrend.
The resistance which is now support is around the $36k and it is the 50 moving average on the four-hour chart, currently at $36,000. Lower support is around $32,000-$34,000, which may stabilize a pullback.
A Falling Wedge has formed around the $40k range and might break out any moment from now, it could break up or down but a falling wedge is a bearish pattern which mostly fall to the down side and when it falls to the down side it falls to the bottom of the wedge which is $36k so if you short bitcoin at the breakout point then $36k should be the take profit zone.
The falling wedge on the Bitcoin price which is at the 1hr timeframe
Note: Never put in a trade until you see a breakout so as not to be squeezed out of your position.
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