4-Hour Analysis:
Big Picture: The highs experienced a significant rejection. Price was unable to hang on to its gains and plummeted. Moving forward, we are nearing strong support domain between 39,500 and 39,200. At these levels, a substantial reaction is expected. However, the market is expected to remain choppy and volatile in general.
On Upside The 40,650-40,800 zone is the first point of resistance for the day. If this is broken, the upside will be extended towards 41,250. This is where the next resistance level can be found, and it needs to be regained and held in order to counteract the selling push. Strength over 41,250 could lead to 41,750 and then towards 42,050 area once more.
On Downside between 39,650 and 39,250, solid supports are likely to appear. The 3-Day MA-200, which has been defending the downside since early January, provides very solid support to this area. Expect another major reaction from these levels. BTC, on the other hand, can take wicks into the 39,000-38,800 range during intra-session. The downside is shielded as long as this MA holds, but losing it will be a red carpet invitation to bears, who are expected to rule the charts for the next few weeks. As a result, bulls must keep this level.
