TA: Bitcoin Dives Further, Here’s Why BTC Could Find Bids Near $42K

May 17, 2021

Bitcoin price extended its decline below the $45,000 support zone against the US Dollar. BTC is declining and it could soon test $42,000 or $40,000 in the near term.

Bitcoin started a major decline from well above $50,000 and it even traded close to $45,000
The price is now trading well below $45,000 and the 100 hourly simple moving average.
There is a key bearish trend line forming with resistance near $45,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
The pair is likely to find bids near the $42,000 zone or $40,000 in the coming sessions.

Bitcoin Price Extends Losses
Bitcoin failed to settle above the $50,000 level and started a fresh decline. BTC broke many important supports near $48,000 and $47,000 to move further into a bearish zone.
The price traded below the $45,000 support level and settled well below the 100 hourly simple moving average. Recently, there was a minor upside correction from the $43,800 zone. The price climbed above the $45,000 level, but it failed to extend gains.

Source: BTCUSD on TradingView.com
A high was formed near $46,645 before the price started a fresh decline. There was a break below the $45,000 support zone. There is also a key bearish trend line forming with resistance near $45,000 on the hourly chart of the BTC/USD pair.
The pair even broke the recent swing low at $43,869 and it is extending losses. An initial support is near the $43,200 level. It is near the 1.236 Fib extension level of the upward move from the $43,869 low to $46,645 high.
The main support is near the $42,000 zone. It is close to the 1.618 Fib extension level of the upward move from the $43,869 low to $46,645 high. Any more losses might call for a test of the $40,000 support zone.
Fresh Increase in BTC?
If bitcoin stays above the $42,000 support zone, there are chances of a decent increase. An initial resistance on the upside is near the $45,000 level and the trend line.
The main resistance is near the $46,500 zone. A close above the $46,500 level is needed to start a steady increase in the coming sessions.
Technical indicators:
Hourly MACD – The MACD is now gaining pace in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is moving lower towards the 20 level.
Major Support Levels – $42,000, followed by $40,000.
Major Resistance Levels – $45,000, $46,500 and $48,000.