Big Picture: Bitcoin’s activity above the macro 50% retracement was a short-term distribution that triggered a significant profit-taking round lower. The current Monday decline was the largest single-day slump since August 2023. Similarly, this dip has aided the cooling of overbought circumstances. Furthermore, lower time-frame indicators have plummeted to near-month lows. Going forward, if bulls remain strong and target higher levels, a short-term consolidation here followed by aggressiveness is required, while any significant rejection higher can open the door to protracted downside, even if just in the short term.
On the Upside the price is seeing resistance at the 42,000 mark. Several efforts have been made, and each time price has failed to demonstrate any strength beyond it. The rebound is only likely to extend once price break through this barrier. Above the 42,000 mark, the next intra-day resistances are at 42,350, 42,960, and 43,200. Each of these resistance levels may see intra-day profit-taking.
On the Downside Bitcoin did receive some support from the lower supports, but it was unable to retain the support and fell all the way to the mid-mid-range levels before recovering. Furthermore, the daily-based EMA-24 was also positioned around this region and almost proved to be the lowest point, as it had been in late November. Price is expected to find firm support between 40,520 to 40,300. Sellers would need to create selling pressure below these levels to prolong the downside for another round lower, which would then extend the decline into 39,980 initially with space for 38,200 next.