Bitcoin Tests Support At $38,000

Bitcoin Continues To Move Lower Amid Lack Of Upside Catalysts

Bitcoin failed to settle above the key resistance level at $40,000 and declined towards the support at $38,000 while other cryptocurrencies also found themselves under pressure.

Ethereum is currently trying to settle below the $2,500 level while Dogecoin has moved below the important support level at $0.20.

Yesterday, crypto markets were worried about the new U.S. infrastructure bill which called for more reporting from crypto exchanges and other market players. It should be noted that the new bill did not include new taxes or other serious blows on crypto.

At this point, it looks that the new bill was used as an excuse to take more profits off the table as Bitcoin faced serious resistance in the $40,000 – $42,000 range. The previous rally was likely driven by short-covering, and now Bitcoin needs additional catalysts to continue its upside move.

Technical Analysis

Bitcoin settled below the support at $39,200 and is currently trying to settle below the next support level at $38,000. RSI remains in the moderate territory, and there is enough room to gain additional downside momentum in case the right catalysts emerge.

If Bitcoin declines below the support at $38,000, it will head towards the next support level which is located at the 20 EMA at $37,000.  A move below the 20 EMA at $37,000 will lead to the test of the 50 EMA which is located near $36,500. In case Bitcoin manages to settle below the 50 EMA, it will continue its downside move and head towards the support at $35,000.

On the upside, the previous support level at $39,200 will serve as the first resistance level for Bitcoin. In case Bitcoin gets above this level, it will have a chance to get to the test of the key resistance level at $40,000. A move above this level will open the way to the test of the resistance at $41,300. In case Bitcoin gets above $41,300, it will move towards the resistance at $42,000.

For a look at all of today’s economic events, check out our economic calendar.