In the Asian session, Bitcoin (BTC/USD) is trading at $39,738 with a bearish bias on the daily chart. We are watching the formation of a symmetrical triangle pattern on the chart.
Last week, Bitcoin was forming this triangle pattern. A sharp break below this triangle could accelerate the bearish move and the price could reach the zone 4/8 Murray at $37,500.
On the contrary, a bullish movement towards $43,761 could occur, where the 200 EMA is located as well as the top of the downtrend channel formed since March 24.
The eagle indicator is moving above an uptrend channel. A rally in Bitcoin is likely in the next few hours on condition it consolidates above the psychological level of $40,000.
With the 21 SMA ($43,283) and 200 EMA ($43,761) acting as resistance and 6/8 Murray ($43,750), these factors indicate that Bitcoin is under strong downward pressure.
BTC has formed a very strong top. Therefore, in case of a pullback towards these levels and if it fails to break and consolidate above $44,000, we will receive a sell signal. If these developments happen, BTC likely to resume the downward movement and could reach the 3/8 Murray zone at $34,375 in the short term.
The key level that is giving Bitcoin some support for now is the zone 4/8 Murray which acts as a pivot point. A daily close below this level would be expected. So, Bitcoin could fall to the psychological level of $30,000 in the medium term.
On the other hand, the fear and greed index of market sentiment returned to extreme fear territory, losing 6 points to 22.
Since Bitcoin has some correlation to the Nasdaq-100, we notice that investors are more willing to continue selling and wait for key support levels like $37,000 or $34,000 to buy back BTC.
Our trading plan for the next few hours is to wait for confirmation of a breakout of the symmetrical triangle pattern which could be a signal to sell if it consolidates below$39,500. In case of an upward movement, we must wait for a confirmation above $40,625 to buy with targets at $43,750 or even $44,332.