Bitcoin started a downside correction below $41,200 against the US Dollar. BTC must stay above the $40,000 support to start a fresh increase.

• Bitcoin started a downside correction below the $41,200 support zone.
• The price is trading below $41,400 and the 100 hourly simple moving average.
• There is a key contracting triangle forming with resistance near $41,400 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair must stay above the $40,000 support zone to remain in a positive zone.

Bitcoin Price Consolidates

Bitcoin price started a downside correction after it failed to clear the $42,500 resistance zone. BTC declined below the $42,000 level to move into a short-term bearish zone.

There was a clear move below the $41,500 support zone and the 100 hourly simple moving average. The decline gained pace below the $41,200 support zone. Finally, it tested the 50% Fib retracement level of the key increase from the $38,808 swing low to $42,368 high.

The bulls were active above the $40,500 support zone. There is also a key contracting triangle forming with resistance near $41,400 on the hourly chart of the BTC/USD pair. On the upside, the price is facing resistance near the $41,400 level and the triangle zone. The 100 hourly SMA is also near the triangle resistance and $41,400. The next major resistance could be near the $41,500 zone. A successful break and close above the $41,500 level might start a steady increase.

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In the stated case, the price might rise towards the $42,000 level. Any more gains could initiate a fresh move towards the key $42,500 barrier in the near term.

Downside Break in BTC?

If bitcoin fails to clear the $41,500 resistance zone, it could continue to move down. An immediate support on the downside is near the $40,800 zone. The next major support is seen near the $40,500 level. The main support sits near the $40,000 zone. It is near the 61.8% Fib retracement level of the key increase from the $38,808 swing low to $42,368 high. A downside break below the $40,000 support zone could push the price further lower towards $38,800. Technical indicators: Hourly MACD – The MACD is now losing pace in the bearish zone. Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now near the 50 level. Major Support Levels – $40,500, followed by $40,000. Major Resistance Levels – $41,400, $41,500 and $42,500.