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.
Daily bitcoin chart shows support and resistance levels with oversold RSI.
Source: TradingView
Chart shows BTC drawdown (percentage decline from peak to trough) currently around 40%, similar to the past bear market.
Source: Koyfin
Disclosure
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.