Bitcoin Holding Support Above $27K; Resistance at $35K-$40K

BTC is oversold and could see a short-term relief bounce.

By Damanick Dantes

May 12, 2022 at 6:36 p.m. UTC

Updated May 12, 2022 at 8:54 p.m. UTC

Alex Thorn

Head of Firmwide Research

Galaxy

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Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Damanick Dantes

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.

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Bitcoin (BTC) appears to be oversold on the charts, which typically precedes a short-term upswing in price.

The cryptocurrency declined toward $25,400 before quickly recovering back above the $27,000 support level. BTC is down by 2% over the past 24 hours and declined by 20% over the past week.

The relative strength index (RSI) on the daily chart is the most oversold since January, which preceded a 30% relief rally. This time, however, negative long-term momentum could cap upside moves around the $35,000 resistance level.

Further, BTC registered a countertrend reversal signal on the daily chart, per the DeMARK indicators. That means selling pressure could wane over the next few days as buyers return from the sidelines. Another daily close above $30,000 would confirm the countertrend signal, although there is a low chance of significant upside from here.

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