Bitcoin (BTC) had a sharp 10% pullback after approaching the $40,000 resistance level on Monday. The cryptocurrency is holding initial support above $36,000 at press time and is up about 25% over the past week.
Lower support is seen around $34,000 which could stabilize the current pullback.
- The relative strength index (RSI) on the four-hour chart reached extreme overbought levels over the weekend as bitcoin rallied. Overbought conditions typically precede price declines as buyers take profits.
- The RSI on the daily chart is approaching overbought levels, which could limit bitcoin’s upside beyond $40,000 resistance.
- Although the intermediate-term downtrend is improving, bitcoin remains in a consolidation phase between $30,000 and $40,000, which suggests buyers and sellers are in a stalemate despite occasional rallies and selloffs.
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.