Bitcoin's Rally Faces Initial Resistance at $45K-$47K, Support Is at $40K
BTC has confirmed a break above its two month-long downtrend.
Feb 7, 2022 at 7:07 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/TQMRX7QT6ZDTTJSBASS5EJUCQY.png)
Bitcoin daily price chart shows support/resistance with RSI on bottom panel (Damanick Dantes/CoinDesk, TradingView)
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Bitcoin (BTC) maintained support above $40,000 over the weekend and is up 6% over the past 24 hours.
The cryptocurrency was trading at around $44,200 at press time and has confirmed a break above its two month-long downtrend.
The intermediate-term outlook has become less bearish for BTC given the recent price bounce. That means buyers could remain active toward the next level of resistance of $45,000 to $47,000. At that point, a brief pullback is to be expected after retracing 38% of the prior downtrend.
The relative strength index (RSI) on the daily chart is not yet overbought, which leaves additional room for price gains this week. Buying activity has stalled over the past few weeks after the RSI first signaled oversold conditions on Dec. 10.
Still, momentum signals remain negative on the weekly and monthly chart, indicating some caution behind the latest price rally.
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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.
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