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Bitcoin Oversold Bounce Faces Resistance at $40K-$43K
Long-term momentum remains very weak and BTC is at a critical point.
Updated May 11, 2023, 5:13 p.m. Published Jan 26, 2022, 7:33 p.m.
Bitcoin (BTC) rose from deeply oversold levels over the past two days, indicating renewed buying after a sharp sell-off. The cryptocurrency faces initial resistance at $40,000-$43,000, which could stall the current price bounce.
BTC was trading around $38,000 at press time and is up 4% over the past 24 hours.
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The relative strength index (RSI) on the daily chart is rising from extreme oversold levels, which could keep buyers active this week. On the weekly chart, the RSI is approaching oversold territory, similar to July 2021, which preceded a strong price rally.
Still, momentum signals remain very weak, indicating limited upside from here. That means buyers will need to make a decisive move above $40,000 to signal a recovery phase.
For now, the downtrend from November remains intact with immediate support at $37,000 and lower support at $30,000.
Damanick Dantes
Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.
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