Optimism from bulls is the leading sentiment of the day after Bitcoin (BTC) price made its way back toward the psychologically important $40,000 level.

In addition to the reversal from this week’s local low at $37,500, Gary Gensler, the chair of the United States Securities and Exchange Commission issued positive comments about the crypto industry and reaffirmed the goal of ironing out fraud in the ecosystem.

Now that Bitcoin price appears back on the path to $40,000, here’s what analysts and traders are saying about the top cryptocurrency.

Traders are waiting for $40K to flip from resistance to support

To many traders, $40,000 is a pivotal level for Bitcoin and how the price performs from here could determine if the market enters another bullish phase or simply rejects to retest underlying support levels again.

As pointed out by the pseudonymous crypto Twitter analyst Rekt Capital, the $40,000 price target is close to the 200-EMA and it is crucial that Bitcoin secures a few closes above this moving average.

Should Bitcoin fail to hold this level, the 50-day EMA at $26,723 could provide the next support zone. Failure to hold above this level increases the possibility that BTC could drift back toward its July lows.

Rekt Captial said:

“If BTC isn’t able to reclaim the 200-day EMA soon, it will flip back into a resistance and could reject price to the mid-$30,000s.”

Bitcoin is at a ‘make or break it’ stage

The importance of a strong BTC close above $40,000 was also highlighted by pseudonymous Twitter analyst Fomocap, who posted the following tweet that identifies the $40,400 price point as a key area to watch.

According to Fomocap, Bitcoin needs to close above $40,400 in order to solidify the uptrend and rejection at this level opens the door to a revisit of the $30,000 range.

Based on the chart provided, the next levels of support below $37,000 are found at $34,300 and $32,000.

Related: Panic selling is crypto investors’ biggest mistake, new survey reveals

Traders will remain indecisive even if BTC hits $40,000

The indecisiveness that controlled Bitcoin price throughout July still extends into August, meaning traders will tread lightly even if the $40,000 level is reclaimed.

As things currently stand, a more decisive breakout that pulls Bitcoin price through the $40,000 to $43,000 resistance cluster is needed before traders will gain the confidence chase after this year’s all-time highs.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.