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Bitcoin Rallies From Oversold Levels; Resistance Nearby

Bitcoin Rallies From Oversold Levels; Resistance Nearby

Bitcoin Rallies From Oversold Levels; Resistance Nearby

Upside momentum is improving after several months of consolidation.

Upside momentum is improving after several months of consolidation.

Upside momentum is improving after several months of consolidation.

AccessTimeIconJul 26, 2021, 11:09 AM
Updated Mar 2, 2023, 8:24 PM

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Bitcoin (BTC) buyers were active over the weekend as the cryptocurrency broke above the 50-day moving average near $34,000. The intermediate-term downtrend is reversing, although resistance near $40,000 could trigger some profit taking.

Upside momentum is improving after several months of consolidation and multiple oversold readings on the charts. Bitcoin was trading around $38,000 at press time and is up 10% over the past 24 hours. Early Monday, the price climbed to about $39,500.

  • The relative strength index (RSI) on the daily chart is approaching overbought levels for the first time since April. This could precede a brief period of profit-taking near the 100-day moving average at $40,000.
  • The weekly RSI is not yet oversold, although selling pressure from May is starting to slow.
  • Price action is consistent with previous rallies from $30,000 support, albeit more persistent given the break above the 50-day moving average.
  • Bitcoin remains in a consolidation phase until price moves above $40,000, which is the top of a two-month range. Initial support is seen around $34,000, which could stabilize a pull-back.  

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