BTC/USD outlook: Close below key supports warns of deeper drop

Bitcoin

Bitcoin bounced from new multi-week low (38501) early Wednesday, after the acceleration lower in past two days was contained by rising 100DMA.

Partial profit-taking lifted the price, but near-term risk remains shifted to the downside, after Tuesday’s close below pivotal 39500 zone (base of rising daily cloud / Fibo 38.2% of 24129/49054 upleg) generated strong bearish signal.

Limited correction should be ideally capped by daily Tenkan-sen (41028) and extended upticks not to exceed daily cloud top (41821) to keep larger bears in play and mark a healthy correction before fresh push lower.

Negative signal is also forming on monthly chart, as bitcoin is on track for the first monthly loss after three consecutive months of strong gains, with long upper shadow of monthly candlestick and a bull-trap above 48484 Fibo barrier, adding to bearish outlook.

Firm break of ascending 100 DMA would risk further weakness and expose next targets at 36592/35940 (50% retracement of 24129/49054 / monthly Ichimoku cloud base).

Conversely, returning above daily cloud top (41821) would ease downside pressure, however, lift above 42500/43000 zone will be required to neutralize.

Res: 40479; 40992; 41369; 41821.
Sup: 39500; 39153; 38500; 36592.