Bitcoin (BTC) Defends $40,000 Support Level After Price Crashes

Bitcoin (BTC) fell considerably on Sept 20, breaking down from the $44,000 support area in the process.

It rebounded after hitting the $40,000 support and created a long lower wick. However, the main support area still lies close to $38,000.

Ongoing BTC breakdown

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BTC decreased sharply on Sept 20, creating a large bearish candlestick and falling below the $44,000 area, which previously had acted as support. Now, the area is expected to act as resistance. 

Currently, BTC has found support above the 0.5 Fib retracement support level at $40,800 and created a long lower wick. 

Despite the bounce, technical indicators are firmly bearish. The MACD and RSI are both falling, and the latter has already moved below the 50-line. In addition to this, the Supertrend is bearish (red line).

If another drop were to occur, the next major support level would be found at $38,000. This target is the 0.618 Fib retracement support level.

Future movement

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The six-hour chart provides similar bearish readings in both the RSI and MACD. 

However, it shows a potential descending channel in place with a support line near the 0.618 Fib retracement support level at $38,000. 

Therefore, there is a further confluence of support levels near $38,000 that indicates BTC is likely to bounce back if it gets there.

Finally, the two-hour chart fails to show any clear bullish signs.

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So, a decrease towards the 0.618 Fib retracement support level at $38,000 does seem like the most likely scenario.

Wave count

The wave count suggests that BTC in wave C of an A-B-C corrective structure (orange). 

The most likely target for the bottom of the move falls between $37,930 and $38,750. The target is found by the 0.618 Fib retracement support level (white) and by giving waves A:C a 1:1 ratio.

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So far, BTC has yet to reach this target.

The sub-wave count (black) indicates that the current drop and bounce were most likely as part of sub-wave three (black), and BTC is currently in sub-wave four. 

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Another drop toward the previously outlined target near $38,000 would complete the entire impulse.

For BeInCrypto’s previous Bitcoin (BTC) analysis, click here.