BTC price needs to hold above $45k to stop the rot that is likely to extend towards $42,800
Bitcoin price has continued to struggle as bears extend Tuesday's massive rout towards the $45,000 zone.
The pullback, which happened on the day El Salvador's Bitcoin adoption law came into effect, saw BTC prices fall from highs above $52,944 to lows of $42,830 before bulls rallied to register a daily close above $46,894.
Still, Bitcoin saw its biggest single-day drawdown on the daily chart since 12 May, with BTC/USD declining by over 11% on the day to see buyers suffer a $5,000 rout.
At time of writing, Bitcoin price is trending near the $45,385 mark as the sell-off pressure remains. Any more losses could see a pullback to yesterday's lows.
Bitcoin price vulnerable to new losses
Bitcoin price surged to highs near $53,000 on Tuesday morning, clearing a key resistance zone around the $52,500 zone. The market however failed to head higher off the daily peak, with the resulting sell-off quickly breaking BTC/USD below key support at $50,000 and $48,000.
On the daily chart, BTC price broke below the lower curve of the Bollinger Bands indicator, with price retesting a critical horizontal support line (red line).
BTC/USD daily chart. Source: TradingView
Bulls' attempts to re-establish control have so far failed as price finds it difficult to hold above the lower band of the Bollinger Bands. The dipping RSI below 50 and the bearish crossover of the daily MACD suggest bears hold the upper hand, a signal that Bitcoin price could see fresh losses.
Currently the 23.6% Fibonacci retracement level of the downswing from $52,944 to $42,830 low provides support at $45,218. If the price breaks below this level, the next stop could be around $44,500. Below this anchor, the downside target for bears will be at 7 September lows near $42,800.
On the upside, bulls face an uphill task to flip the resistance zone at the 38.2% Fibonacci retracement level ($46,694) into support. Flipping above this level would allow buyers to target the 50% Fib level ($47,888).
The next resistance zone is at the middle curve of the Bollinger Bands currently at $48,814, with the next supply wall likely at the psychological $50,000 level.
From here, BTC/USD could resume its uptrend and target new highs above $52,000.