Bitcoin Correction Phase Deepens; Support Around $27K-$30K

Bitcoin (BTC) suffered a near-10% drop over the past 24-hours, fueled by talks of tighter U.S. monetary policy and China’s ongoing pressure on crypto miners. The world’s largest cryptocurrency by market value is still up about 11% year to date, although the uptrend has significantly weakened over the past few months.

Resistance is strong around the $40,000 price level, which could keep sellers active towards lower support at $30,000. The next level of support is at $27,000 which could stabilize the current sell-off.

BTC was trading around $32,800 at the time of publication.

• Bitcoin registered a series of lower price highs since April and is now oversold based on the daily relative strength index (RSI).
• However, in a corrective phase, oversold conditions can remain in place for a while before a price recovery materializes.
• Bitcoin will need to remain above $30,000 to avoid entering bear market territory, which is defined by extended period of drawdowns (percentage decline from peak to trough) greater than 30%.
• The downward sloping 100-day moving average indicates trend weakness over the near-term. This means that price rises should remain limited until oversold signals appear on the weekly chart, which could occur later this month.