Bitcoin Holds Short-Term Support; Upside Limited to $50K

Buyers will need to defend lower support levels this weekend to avoid a series of lower price highs.

Aug 27, 2021 at 11:22 a.m. UTC

Updated Aug 27, 2021 at 3:52 p.m. UTC

Damanick is a crypto market analyst at CoinDesk where he writes the daily Market Wrap and provides technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also an equity/fixed income portfolio manager and does not invest in digital assets.

Bitcoin (BTC) is holding initial support around $47,000 and is roughly flat over the past 24 hours. The cryptocurrency appears to be oversold on intraday charts, although slowing momentum suggests buyers are still exhausted from the $50,000 resistance level.

So far, price is still above the 200-day moving average around $46,000. Lower support is seen at the upward sloping 50-day moving average between the $40,000-$42,000 breakout zone.

The relative strength index (RSI) is approaching oversold levels on the four-hour chart, similar to Aug. 19, which preceded a near 10% price bounce.
However, the RSI is still declining from overbought levels on the daily chart. This typically signals limited upside, especially given low volume and upside exhaustion on the charts.
Buyers will need to defend lower support levels this weekend in order to avoid a series of lower price highs since April.

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