Starting January 7, the BTC/USD pair forms a sideways price channel on the hourly chart. The channel limits the BTC/USD pair in the areas of 40500 and 42700. Yesterday, the BTC/USD pair bounced off the lower border of the channel and tried to approach the upper border, but the pressure increased. As a result, the BTC/USD pair was unable to rise above 42500 and began to move downward within the price channel.
It is worth noting that yesterday the BTC/USD pair dropped below 40000 for several minutes. The orders were quickly executed and helped the pair quickly return above the key level. At time of publication, the BTC/USD pair is trading at around 41800, below the 100-hour moving average. The pair needs to stay above 48100 to avoid a new decline. If the BTC/USD pair falls below this level, it could drop to the area of 41500. A breakout of this level will send the BTC/USD pair to the support area of 41000. Any movement below this level will allow the bears to test the psychological support level of 40000 again.
If the bulls hold the BTC/USD pair above 41800, they will try to bring the Bitcoin price back above 42000. However, the BTC/USD pair must overcome yesterday’s high at 42350 and then the upper border of the price channel around 42750. The next serious resistance is near the level of 43500. Any move above this level increases the chances for the BTC/USD pair to rise above the level of 44500.
Bitcoin price movement will react to US inflation data due out on Wednesday. If inflation rates turn out to be higher than expected, it could further weaken the prospects for a strong recovery.