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Bitcoin Price Analysis: After Yesterday’s $4000 Plunge, Is BTC Correction Over?

Bitcoin climbed by 4% in the past 24 hours after gaining over $2,000 from today’s low of $44,000 (Bitstamp). The primary cryptocurrency is up by a total of 23% this past week after it broke the previous ATH price from January 8th, 2021, of $42,000. This comes following the news that Tesla had purchased $1.5 billion worth of BTC.

After breaking $42,000 on Monday, Bitcoin continued higher to reach the critical resistance at $46,430 (1.618 Fib Extension). It spiked above it on Tuesday, setting a new ATH price at $48,216 according to Bitstamp, but could not close a daily candle above the aforementioned level, and it’s currently trading around it.

Yesterday, Bitcoin dropped into the support at $44,415 (.236 Fib Retracement), wicking to a daily low of $43,700 on Bitstamp, which is also an ascending trend-line that started forming in mid-December 2020. This concludes a 2-day drop where BTC lost around $4000 of its face value. As mentioned, the cryptocurrency rebounded quickly, and, as of now, it’s facing critical resistance.

BTC Price Support and Resistance Levels to Watch

Key Support Levels: $44,415, $44,000, $42,075, $40,735, $40,000.

Key Resistance Levels: $46,427, $47,350, $48,000 – $48,216, $48,570, $49,500, $50,000.

Looking ahead, if the bulls break $46,427, the first resistance lies at $47,530 (1.272 Fib Extension – yellow). This is followed by $48,000, $48,216 (ATH), $48,570 (1.414 Fib Extension – green), $49,500, and $50,000.

On the other side, the first support lies at $44,415 (.236 Fib). This is followed by $44,000 (and yesterday’s low of $43,700), $42,075 (.382 Fib & previous ATH), $40,735 (previous high-day closing price), and $40,000 (.5 Fib).

The RSI on the 4-hour and also on the 1-hour reveals the strength of the bulls, as there is a clear bullish divergence on both timeframes.

Bitstamp BTC/USD Daily Chart

BTC/USD Daily Chart. Source: TradingView

Bitstamp BTC/USD 4-Hour Chart

BTC/USD 4-Hour Chart. Source: TradingView

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Cryptocurrency charts by TradingView.

About The Author

Yaz Sheikh

Yaz is a cryptocurrency technical analyst with over seven years of technical analysis trading experience. As an Economics graduate, he has taken a keen interest in the future potentials of blockchain in the financial industry. Removing crypto from the equation, Yaz loves to watch his favorite football team and keep up-to-date with the latest fights within the UFC.

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