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Bitcoin Price Analysis: BTC Retrace Back to $40K; What Next?

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Bitcoin Price Analysis: BTC Retrace Back to $40K; What Next?
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Bitcoin price prediction is mildly bearish for the short term but may show a bounce from the support. It faced rejection from the $44,000 level and the price witnessed minor profit booking. 

The BTC coin price fell approximately 5% in the last trading session and retraced back to $40,000. Luckily, the buyers were active near the support and succeeded in defending $40K. 

On the higher time frame, the Bitcoin crypto chart pattern is bullish and this correction is just a short-term retracement. However, the sell-off may continue for a few more days and the price may retest the $38,000 level. 

In the last month, the Bitcoin cryptocurrency price consolidated in a range between $34,801 to $38,001 and formed a strong base. 

Later, the bulls won the battle inside the range and succeeded in taking control over the $38,000 zone. It triggered the rally and the price began to rise upward by forming higher high swings. 

The recent rally in BTC looks reliable because a more-than-average buying volume supports it. Therefore, if the price retraces back to the breakout level, new participants may come forward to build fresh longs.

Bitcoin Price Analysis: Is the Correction Temporary?

Bitcoin Price Analysis: BTC Retrace Back to $40K; What Next?
Source: BTC/USDT daily chart by Tradingview

Bitcoin price prediction suggests a short-term correction is possible but it will be too early to say that trend is reversing downward. This crypto asset has rallied a lot in the first week of December. So, a minor correction is good for the fair price discovery. 

Till the BTC crypto price sustains above $38,000 the buyers will remain active. Any attempt to pull the price down below $38K might get bought up. The analysis suggests the recent correction looks temporary so it’s better to accumulate the gem on dips. 

BTC Price Gone Far Away From the Moving Averages

BTC price has gone far away from the 50-day and 200-day EMAs, indicating a strong uptrend. However, the other perspective will be that the price looks mildly overstretched. So, it is likely to retrace back to the 50-day EMA or spend some time in consolidation near the EMA. 

The RSI at 58 reversed down after testing the overbought territory, indicating mild weakness. The MACD curve also loses momentum and prepares to intersect the average line, showing that bears are getting active.

Conclusion

Bitcoin price prediction is mildly bearish for the short term and suggests it may test the $38,000 level. However, the buyers are also active near the demand zone. So, the probability of bounce back remains high. 

The analysis suggests this short-term correction in BTC price looks temporary. So, it may be a good opportunity to buy the gem at lower levels. 

Technical levels
  • Resistance levels: $44,200 and $44,633.05
  • Support levels: $7.00 and $34,794.70
Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

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