Bitcoin Stalls Near Resistance; Lower Support at $40K

Overbought signals on intraday charts preceded the current pullback.

AccessTimeIconFeb 8, 2022 at 7:56 p.m. UTC
Updated Feb 8, 2022 at 11:12 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) reached a high of $45,488 over the past 24 hours, near a key resistance zone that preceded the current pullback. The cryptocurrency could find lower support at $40,000 into the Asia trading day.

The relative strength index (RSI) on the four-hour chart is declining from overbought territory, similar to what occurred in late December amid a short-term downtrend. This time, however, bitcoin has broken above previous resistance levels, which means the current pullback could stabilize soon.

One concern is the low conviction among buyers, evidenced by low trading volume during the recent price rally. Low volume rallies typically result in pullbacks or range-bound trading before a more definitive price bottom is confirmed.

Bitcoin was trading around $43,000 at press time and is down 2% over the past 24 hours.

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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.