Bitcoin Looks Ready For A Reversal, But It Needs To Hold This 1 Key Level

Bitcoin BTC/USD is trading higher Wednesday in a cryptocurrency market that is bouncing back.

Bitcoin looks to have possibly bounced off a support level for a second time at a level that was previously an area of resistance before turning into support. The first time Bitcoin bounced off this support level was in early October 2021, and it was followed by a run up to over $60,000.

Bitcoin was up 1.91% at $43,569 Wednesday afternoon. 

See Related: Bitcoin Moves Bearishly: What Does The Chart Say?

Bitcoin Daily Chart Analysis

• Bitcoin looks to possibly be seeing a bounce near the $40,000 level after falling since the beginning of December 2021.
• This is a level that was previously resistance in early 2021, and then turned into a support level in October of the same year. The price is attempting to bounce here once again, and it may find resistance near the $60,000 level. If unable to bounce, Bitcoin has room to fall back to the $30,000 level before it finds another area of previous support.
• The crypto trades below both the 50-day moving average (green) and the 200-day moving average (blue). This shows the crypto is trading with bearish sentiment, and each of these moving averages may hold as an area of resistance in the future.
• The Relative Strength Index (RSI) saw a bounce back Wednesday and pushed higher to 40 on the indicator. This shows that buyers have pushed back into the crypto, although more sellers still remain overall. 

What’s Next For Bitcoin?

Bitcoin is looking to see the bounce off the $40,000 level. If it occurs, it could see a run up back to the $60,000 level. For this to occur, the RSI will need to cross back above the middle line to show there are more buyers than sellers.

Bulls are also looking for the price to cross above the moving averages for the sentiment in the crypto to turn bullish once again.

Bears are looking to see the price be able to fall below the $40,000 level and for it to drop back to the $30,000 level. Eventually bears are looking to see the price fall below the $30,000 level and be able to hold below it, hinting further bearish moves may come in the future.