Bitcoin (BTC) is roughly 16% higher off the $47,000 weekend low as buyers responded to oversold conditions. The cryptocurrency was trading around $54,700 at the time of writing. The next level of resistance is around $56,000.
- The relative strength index (RSI) on the hourly chart shows BTC is now at the most overbought level since April 14, when it reached an all-time high around $64,800.
- BTC is approaching resistance around $56,000, which is roughly a 50% retracement of the prior two-week downtrend.
- Initial support on the hourly chart is at the 50-period volume weighted moving average around $51,800.
- The weekly RSI shows considerable loss of upside momentum similar to June 2019, which preceded a corrective phase. For now, short-term oversold conditions should support brief price recoveries, albeit vulnerable to sharp swings.
- “Bitcoin’s corrective phase should run its course within [two to three] months. Support is near $42,000 as a gauge of downside risk within the long-term uptrend,” wrote Katie Stockton of Fairlead Strategies. She also points to sell signals on the weekly BTC chart.
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.