BTC/USD is trading above the psychological level of 40,000, after recovering from the low of 39,162.
It is trading above the 21 SMA on the 4-hour chart. As long as BTC remains above this level, a move higher towards the 200 EMA located at 42,873 could occur.
In case Bitcoin fails to consolidate above 5/8 Murray and break below the 21 SMA, it is expected to drop towards support of 4/8 Murray at 37,500.
In the chart above, we can see that Bitcoin broke the downtrend channel that was formed since April 5. This is a positive sign. As long as it remains above this channel, we could expect a recovery in the coming days.
The uncertainty among investors is erasing the strength of BTC. Consequently, the market has become more conservative.
The dollar continues to be the winner and investors prefer lower risk assets and take refuge in gold. In turn, risky assets are losing ground. The price of Bitcoin has been hurt by global risk aversion.
However, we could expect a slight recovery in Bitcoin in the short term because it is showing an oversold signal on the 4-hour chart.
Our trading plan for the next few hours is to buy BTC above 40,586 with targets at 42,873 and 7/8 Murray around 46,550. The eagle indicator supports our bullish strategy.
