Technical Analysis of Bitcoin (BTC) Price: Will it Drop Down below US$31,000 or Break above US$40,000?

Bitcoin and most other cryptocurrencies have started to bounce off strongly from their support levels. This indicates a possible accumulation by the bulls. BTC has again held the major support level at US$31,000, which again indicates accumulation at lower levels. Some analysts also speculate that traders are selling their crypto holdings to long-term hodlers in the hope that “a supply shock” will take place when the process of re-accumulation completes.

In fact, strong hands have again started to enter the market. The latest of them is the US$2.3 trillion asset manager, Capital International Group. It has acquired a 12.3% stake in MicroStrategy, one of the largest Bitcoin holders having 105,084 Bitcoin on its books. With this acquisition, Capital International Group has taken indirect exposure to Bitcoin.

By keeping these information in mind, let’s take a closer look at the technical analysis of bitcoin price:

BTC/USDT

Today’s chart of Bitcoin price against USDT shows a long tail on the candlestick. It indicates that aggressively defending the strong support at the US$31,000 level. However, the buyers are facing a strong resistance at the 20-day exponential moving average (which is located at US$33,973). This 20-day EMA is an important level.

If the price again falls from the level at US$33,973, it means that the negative sentiment remains strong and the traders are taking no risk and selling at every minor rally. The bears, on the other hand, are consistently trying to bring down the BTC/USDT prices and is likely to make one more attempt to sink the price below the US$31,000 level. If the bears succeed in bringing down the price below US$31,000 level then the next critical support is located at US$28,000. This is a very important level for the BTC price because it may intensify selling pressure. In that case, the next major support level is located at US$20,000.

Now, let’s check what will happen if the price of Bitcoin against USDT holds the 20-day EMA. In that case, the price will keep moving upwards and could reach the crucial 50-day simple moving average (SMA) at US$35,361. If the 50-day SMA is also broken above successfully and closes above this level then it would mean that the sellers are losing grip on the BTC market. In that case, there is a high probability that the market breaks above the US$36,670 level. In fact, this will restart the upward price movement of BTC/USDT pair and the price will move towards the resistance zones around US$41,330 and US$42,451.67.

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