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BTC Rejected At $40K

BTC’s price dropped sharply following a rejection at the declining resistance line. Even though it has made a temporal recovery, technical indicators show that it will still likely make a further decline before any reversal. After setting a new peak price on November 9, BTC trades within a dipping resistance trend line.

The Sharp Fall

It couldn’t surge past this resistance line two days ago before a sharp fall during last night’s trading session. Even though this rejection showed the strength of this trendline, BTC will eventually breakout from this resistance since it will continue to retest this line until the line weakens and is broken down.

A breakout from this trend line would see BTC attempt to surpass the next crucial resistance at the $40.87K level. If it can flip this resistance into support as previously, its next target would be to surpass the $46.7K price level, which coincides with the 38.3% fib retracement level.

BTC Price Action On The 2-Hour Timeframe

The 2-hour timeframe suggests two theories supporting BTC price movement would be bearish. First, BTC would likely make a bearish move. It had previously closed above the candlestick peaks of January 26 before closing below it during the next trading session. 

Also, it deviated from a January 27-established rising support line. This action proves that a short-term squeeze is more likely to occur than a long-term trend reversal.

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BTC/USD 2-hour chart. Source: Tradingview

The $36.63K level, which coincides with the 38.2% fib retracement level, will provide temporary support for the leading cryptocurrency. The 50% fib retracement level, which corresponds to the $35.93K level, will provide the main support for BTC.

BTC Fib retracement support and resistance level. Source: Tradingview

Despite the underwhelming price action, technical indicators showed that BTC will still retest the $40K price resistance level. Another popular crypto analyst, Willy Woo, tweeted that “on-chain demand from value investors and short-term traders are now at the upper oversold point. Hence, there is no cause for alarm regarding BTC price.”

The US Equities Effect

Some analysts have attributed BTC’s rejection at the $40K level to reports of underperformance by top Wall Street US equities. Popular stock trader, Alex Kruger, tweeted the percentage effects of these companies’ reports on their share prices.

Notable on the list was Facebook, whose report showed that users are starting to lose the platform – a first in the platform’s history. Hence, it was no surprise that its share price tanked by more than 21%. 

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Popular Cointelegraph crypto analyst, Micheal van de Poppe, opined that “if BTC fails to sustain the $37K level, it would likely dip towards the $34K range.” He further said that the performance of the crypto market can now be monitored vis-a-vis the performance of the US dollar index (DXY).

According to him, there is an inverse relationship between the DXY and the crypto market. “A downtrend in the DXY over the next couple of weeks should cause an uptrend in the BTC price,” Van De Poppe further tweeted.


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Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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