Bitcoin Holds Support; Approaching $50K Resistance

Bitcoin (BTC) is holding support above $42,000 and could face resistance near $50,000 as short-term momentum behind the short-squeeze rally fades. The cryptocurrency was trading around $47,400 at press time and is up 3% over the past 24 hours.

The short-term uptrend remains intact despite several overbought pullbacks that were resolved to the upside. Bitcoin remains in breakout mode after rallying past $42,000, which marked the completion of a two-month consolidation phase.

• The relative strength index (RSI) on the four-hour chart is near overbought levels, which typically precede brief pullbacks. The last extreme overbought reading on July 26 occurred before a 10% pullback.
• Bitcoin has maintained a series of higher price highs since the Aug. 6 breakout above $42,000. This means buyers continue to defend support levels as the broader uptrend improves.
• The weekly chart has positive momentum signals similar to the start of a crypto rally around November 2020.