BTC price needs to hold above $45,000 to stop the fall that is expected to extend towards $42,800.
Bitcoin prices continued to struggle as bears extend Tuesday’s massive rout towards the $45,000 area.
The pullback, which occurred on the day the Salvadoran Bitcoin adoption law went into effect, saw BTC’s price go from a high of $52,944 to a low of $42,830 before the bulls rallied to record a daily close above $46,894.
Nevertheless, Bitcoin saw its biggest one-day drop on the daily chart since May 12, with BTC/USD falling more than 11% on the day and buyers suffering a $5,000 rout.
At the time of writing, Bitcoin’s price is near the $45,385 mark as selling pressure remains. Any further losses could result in a return to yesterday’s lows.
Bitcoin price vulnerable to further losses
Bitcoin price reached highs near $53,000 on Tuesday morning, breaking through a key resistance area around the $52,500 area. The market failed to break above the daily high, however, and the resulting sell-off quickly pushed the BTC/USD pair below key support at $50,000 and $48,000.
On the daily chart, the price of BTC broke below the lower curve of the Bollinger Bands indicator, with the price retesting a critical horizontal support line (red line).
BTC/USD daily chart. Source: TradingView
The bulls’ attempts to regain control have so far failed as price is struggling to hold above the lower band of the Bollinger Bands. The drop in the RSI below 50 and the bearish crossover in the daily MACD suggest that the bears have the upper hand, a signal that Bitcoin’s price may be suffering further losses.
Currently, the 23.6% Fibonacci retracement level of the decline from $52,944 to $42,830 provides support at $45,218. If price breaks below this level, the next stop could be around $44,500. Below this anchor, the downside target for bears will be the September 7 low near $42,800.
On the upside, bulls have a tough task ahead of them to turn the resistance area at the 38.2% Fibonacci retracement ($46,694) into support. A breakout above this level would allow buyers to target the 50% Fib level ($47,888).
The next area of resistance is at the median Bollinger Bands currently at $48,814, with the next supply wall likely at the psychological $50,000 level.
From there, BTC/USD could resume its uptrend and target new highs above $52,000.