Bitcoin Holds Short-Term Support; Faces Resistance at $40K

BTC re-tested minor support around $30,000 over the weekend, but stronger support is seen around $27,000.

May 24, 2021 at 11:29 a.m. UTC
Updated Sep 14, 2021 at 12:59 p.m. UTC

Bitcoin (BTC) remained under pressure over the weekend as traders react to China’s latest news about tightening crypto regulation. The cryptocurrency is down about 36% month to date and was trading around $37,000 at the time of writing. Price recoveries should remain limited to $40,000 as the broader uptrend weakens.

Slowing momentum has been the dominant theme this year as bitcoin failed to maintain all-time highs. Long term sell signals were in place before headlines accelerated price declines, which preceded a gradual and then sudden capitulation of long positions.

  • The relative strength index (RSI) on the four-hour chart has struggled to break above neutral over the past week. In a downtrend, oversold readings can persist for extended periods, which suggests a lack of significant support levels.
  • Bitcoin re-tested minor support around $30,000 over the weekend, but stronger support is seen around $27,000.
  • BTC is trading below the 100-day moving average and the correction does not appear exhausted at current levels. This means sellers should remain active as bitcoin struggles to break above $40,000.

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.