Bitcoin (BTC) is rising from oversold levels as traders continue to digest Tesla’s announcement on Wednesday, which triggered a near 15% price drop. The cryptocurrency held support around $46,000 and is currently trading back above $50,000 at the time of writing.
However, long-term momentum continues to weaken, which could limit price recoveries this weekend and into next week.
- Bitcoin remains in a consolidation phase with frequent drawdowns, which was in effect for several months before the Tesla announcement that it has ended its cars-for-bitcoin program because of environmental concerns.
- The relative strength index (RSI) on the four-hour chart registered an oversold signal on Thursday, which could keep buyers active towards $53,000-$54,000.
- On the daily chart, the RSI is not yet oversold. Meanwhile, the weekly RSI has receded from extreme overbought levels and is now neutral. This means stronger support around $42,000 should not be ruled out.
- Additionally, bitcoin on May 10 made a lower price high on the daily chart around $59,000, which suggests the short-term trend is weakening.