Bitcoin Finds Initial Support at $40K, Pauses Price Jumps

Bitcoin was trading in a tight range between $43,000 and $44,000 over the past 24 hours. Support is nearby, which could limit pullbacks over the short term.

Buyers will need to maintain a price floor above $40,000 to sustain the uptrend from $36,000 that occurred on Feb. 3. Intraday charts appear overbought, however, which could stall the upside, similar to what occurred last week.

For now, the 50-day moving average on the four-hour chart has flattened, indicating a pause in upside momentum. Resistance remains at $46,000, and if buyers fail to maintain current levels, a dip toward $35,000 seems likely.

Traders tracked a swift decline for BTC/USD around the start of trading, with lows of $43,312 appearing on Bitstamp. The pair had managed to hit $44,500 overnight, these gains dissipating as traders awaited cues from the Fed on inflation, asset purchase tapering and the all-important interest rate hike schedule.

With Bitcoin and altcoins highly correlated with stocks, any testing times for traditional markets in the form of rate hikes could equally spell gloom for crypto investors.

Among crypto traders, the mood was thus one of near-caution against broader cautious optimism. Some investors believe more upside to come, but a short-term pullback and/or chop before major resistances are breached makes sense sooner than later.

Attention was further out than the hourly chart. The coming weekly close, after last Sunday’s disappointment, still had the opportunity to reveal an uptrend in the making.