Bitcoin Overbought at $40K Resistance; Support at $34K-$36K

Lower support is seen around $34,000-$36,000, which is the middle of a two-month range.

Jul 29, 2021 at 11:23 a.m. UTC
Updated Sep 14, 2021 at 1:32 p.m. UTC

Bitcoin (BTC) completed a recovery from Monday's 10% pullback and is now re-testing the $40,000 resistance level. The cryptocurrency appears overbought, which could trigger some profit taking after a near 25% rally over the past week.

Lower support is seen around $34,000-$36,000, which is the middle of a two-month range.

  • The relative strength index (RSI) on the four-hour chart is declining from an extreme overbought reading on Monday. A lower high on the RSI indicates a bearish divergence, which could stall bitcoin’s short-term uptrend.
  • Initial support is seen at the 50-period moving average on the four-hour chart, currently at $36,000. Lower support is around $32,000-$34,000, which could stabilize a pullback.
  • The intermediate-term trend is improving with a significant loss of downside momentum over the past few weeks. Buyers could remain active at lower support levels, although a breakout above $40,000-$45,000 is needed to resume the long-term uptrend.  

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. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.