Bitcoin bears battle bulls to prevent a return to $40,000 for BTC

Bitcoin price fell below the Ichimoku Cloud over the weekend and extended its losses to sub $40,000 for the first time since early February. However, Tuesday’s price action recovered nearly all of Monday’s losses. Buyers have extended the rally from yesterday, but near-term resistance threatens to terminate that bullish momentum.

Bitcoin price attempts to confirm a bottom and return to $40,000

Bitcoin price has suffered some significant bearish pressure over the past week. Risk-on markets across the globe continue to feel pressure due to Russia’s invasion of Ukraine.

Since last Tuesday (February 15, 2022), Bitcoin has dropped from a swing high of $44,760 to a swing low of $36,400 – nearly a 20% drop in a week. Whether the news or standard technical analysis behavior is to blame, BTC nonetheless returned to test a former resistance level as support – so far, it has held.

Bulls are likely to take over and push Bitcoin price back inside the Ichimoku Cloud to test the 61.8% Fibonacci retracement at $41,160 as resistance. Ultimately, bulls will need to return Bitcoin above the Ichimoku Cloud (Senkou Span B) to return BTC to a full-on bull market. A daily close above $42,685 would position Bitcoin into an Ideal Bullish Ichimoku Breakout, leading to moves beyond $50,000 and into the $60,000 value areas.

BTC/USD Daily Ichimoku Kinko Hyo Chart

However, downside risks are significant. If bears push Bitcoin price to a close below $36,500, then new 2022 lows and even a retest of the 2021 lows at $28,500 is almost a certainty.