- Bitcoin price may tag lower levels as the leading cryptocurrency searches for reliable support.
- The prevailing chart pattern suggests that BTC could continue its uptrend after the coin retraces.
- Bitcoin may fall toward the strongest line of defense at $39,917 before revealing next directional intentions.
Bitcoin price has projected a bullish outlook as BTC continued to record higher highs. However, the leading cryptocurrency may drop lower to retest key support levels while the bulls catch their breath ahead of continuing the uptrend.
Bitcoin bulls take a break
Bitcoin price has formed an ascending parallel channel on the 12-hour chart, suggesting a bullish outlook for the bellwether cryptocurrency. Despite the indication of optimism, BTC may fall lower to test critical support levels as the bulls catch their breath.
The first line of defense for Bitcoin price is at the 100 twelve-hour Simple Moving Average (SMA) at $42,221, then at the 21 twelve-hour SMA at $41,359.
Additional selling pressure may push Bitcoin price lower toward the 38.2% Fibonacci retracement level at $40,878, then toward the downside trend line of the governing technical pattern at $39,917, coinciding with the 50 twelve-hour SMA.
An uptick in sell orders may incentivize the bears to drop lower toward the 23.6% Fibonacci retracement level at $38,232 before tagging the support line given by the Momentum Reversal Indicator (MRI) at $37,331.
BTC/USDT 12-hour chart
However, a rise in bullish sentiment may see the buyers tag the 50% retracement level at $43,016, intersecting with the middle boundary of the prevailing chart pattern.
The Arms Index (TRIN), which gauges overall market sentiment suggests that there are still more buyers than sellers in the market.
Bitcoin price may be challenged by the 61.8% Fibonacci retracement level at $45,154 before targeting the upper boundary of the prevailing chart pattern at $48,199, coinciding with the 78.6% Fibonacci retracement level.