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Bitcoin Sell-Off Could Stabilize Around $42K Support
BTC remains under pressure and could find lower support near $42K as long-term momentum wanes.
Sellers remained active on Wednesday as bitcoin (BTC) dropped below $50,000 after Tesla halted acceptance of payments for new vehicles in the currency.
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The cryptocurrency was trading around $49,400 at press time and could find lower support around $42,000.
Long-term momentum continues to weaken during several months of consolidation. BTC remains under pressure after reaching the upper bound of a three-year price channel.
- The relative strength index (RSI) on the four-hour chart is oversold similar to April 25 which preceded a price recovery.
- However, the RSI is not yet oversold on the daily chart. This means bitcoin could trade lower towards $42,000 support.
- Bitcoin returned below the 100-day moving average which created resistance around $53,600.
- Over the short term, higher volatility and frequent drawdowns could discourage buyers. For now, the long-term trend remains intact above $42,000.
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.
