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Bitcoin Overbought at $40K Resistance; Support at $34K-$36K
Lower support is seen around $34,000-$36,000, which is the middle of a two-month range.
Bitcoin (BTC) completed a recovery from Monday's 10% pullback and is now re-testing the $40,000 resistance level. The cryptocurrency appears overbought, which could trigger some profit taking after a near 25% rally over the past week.
STORY CONTINUES BELOW
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Lower support is seen around $34,000-$36,000, which is the middle of a two-month range.
- The relative strength index (RSI) on the four-hour chart is declining from an extreme overbought reading on Monday. A lower high on the RSI indicates a bearish divergence, which could stall bitcoin’s short-term uptrend.
- Initial support is seen at the 50-period moving average on the four-hour chart, currently at $36,000. Lower support is around $32,000-$34,000, which could stabilize a pullback.
- The intermediate-term trend is improving with a significant loss of downside momentum over the past few weeks. Buyers could remain active at lower support levels, although a breakout above $40,000-$45,000 is needed to resume the long-term uptrend.
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.
