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Bitcoin Short-Term Bounce Faces Resistance at $40K
Extreme oversold readings preceded an uptick in BTC.
Updated May 11, 2023, 6:21 p.m. Published Jan 24, 2022, 7:29 p.m.
Bitcoin (BTC) returned above $35,000 after multiple oversold signals appeared on the charts. The cryptocurrency faces initial resistance at $40,000, which could limit upside over the short term.
Bitcoin is up 3% over the past 24 hours after rising from an intraday low near $33,000, while the broader crypto market has stabilized.
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The relative strength index (RSI) on the daily chart registered the most extreme oversold reading since the March 2020 crash. The previous extreme low was on Nov. 20, 2018, which preceded a few months of rangebound price action before a rally took place.
For now, a downtrend of lower price highs since November remains intact, which means sellers could remain active at resistance levels.
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Bitcoin's massive underperformance to stocks in Q4 bodes well for January, says K33's Lunde
After an active morning Tuesday, bitcoin flattened out in afternoon trading around the $87,500 area, up 2% over the past 24 hours.
What to know:
- Bitcoin held in the $87,500 in U.S. afternoon action on Tuesday, up 2% over the past 24 hours.
- K33 analyst Vetle Lunde suggested BTC's relative weakness to stocks this quarter could mean rebalancing-led buying once January rolls around.
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