FX.co ★ Bitcoin creates a base around $40,500.

Bitcoin has been under pressure lately, falling from $50,000 and making lower highs. However recent price action has shown that the $40,500 level has been tested and respected three times and not broken. I do not expect to see a fourth bounce of this level.

Green rectangle- major short-term support

Bitcoin has support at $40,500. Bulls do not want to see this support break. So far we have seen three failed attempts to break it. If price tests the $40,500 again, I expect the support to be broken. As long as price is below the blue trend line resistance, I remain pessimistic for Bitcoin's near future. If Bitcoin fails to hold $40,500, we will get a new bearish signal. Traders need to be cautious. Recent price action has confirmed the support levels that need to hold, for trend to change to bullish again.