Bitcoin Recovers Sharply, Aiming for US$40,000 Once Again

Bitcoin price yet again plunged towards the US$31,000 zone. It soon found a strong buying interest near the US$31,000 level, thanks to El Salvadore’s decision to become the first country in the world to recognize Bitcoin as a legal tender. The BTC’s price rally continued and successfully broke above the US$35,000 level, thereby entering a positive zone.

A clear break can be seen above a major bearish trend line with resistance around the US$35,000 level on the BTC/USD pair’s hourly chart. The rally continued and made the BTC price settle above the US$36,000 resistance as well as the 100 hourly SMA (Simple Moving Average).

At one point in time, the Bitcoin price went above the US$37,000 level and traded as high as US$37,484. It consolidated above the US$37,000 level for some time but then came down to the current level of US$36,830.93. It needs to be seen whether the BTC price of able to hold the nearest support level at US$36,500. If it slips below this level, the next major support zone is around US$36,000 level. This price is located close to the 23.6% Fibonacci retracement level of the upward swing from the low at US$31,050 to a high at US$37,484.

In case, the price again corrects below the US$36,000 level, the next major support level is situated near the US$35,000 level as well as the 100 hourly SMA (Simple Moving Average). The next major support level is situated near the US$34,250 level, which is located close to the 50% Fibonacci retracement level of the upward swing from the low at US$31,050 to a high at US$37,484.

If the price moves above the current level of US$37,000 level and continues the rally then the next major resistance is located near the US$37,500 level. In case of the continued upward rally of Bitcoin price, the main resistance is situated near the US$38,000 zone. If the BTC/USD pair succeeds to surpass the US$38,000 zone then in the near term the price could rally towards the US$40,000 level.

Some of the important technical indicators to take note of are Hourly MACD (‘Moving Average Convergence Divergence) and Hourly RSI (Relative Strength Index). While the MACD is gaining pace in the bullish zone, the Hourly RSI is located well above the 50 levels (indicating building up of upward momentum).

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