Bitcoin Short-Term Bounce Faces Resistance at $40K

Extreme oversold readings preceded an uptick in BTC.

AccessTimeIconJan 24, 2022 at 7:29 p.m. UTC
Updated Jan 24, 2022 at 10:24 p.m. UTC

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

Bitcoin (BTC) returned above $35,000 after multiple oversold signals appeared on the charts. The cryptocurrency faces initial resistance at $40,000, which could limit upside over the short term.

Bitcoin is up 3% over the past 24 hours after rising from an intraday low near $33,000, while the broader crypto market has stabilized.

The relative strength index (RSI) on the daily chart registered the most extreme oversold reading since the March 2020 crash. The previous extreme low was on Nov. 20, 2018, which preceded a few months of rangebound price action before a rally took place.

For now, a downtrend of lower price highs since November remains intact, which means sellers could remain active at resistance levels.

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Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.

CoinDesk - Unknown

Damanick was a crypto market analyst at CoinDesk where he wrote the daily Market Wrap and provided technical analysis. He is a Chartered Market Technician designation holder and member of the CMT Association. Damanick is also a portfolio strategist and does not invest in digital assets.