Bitcoin Oversold, Resistance at $33K-$35K

BTC is on track for its first consecutive seven-week decline.

May 13, 2022 at 6:33 p.m. UTC
Updated May 13, 2022 at 6:45 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) bounced toward $30,000 on Friday as buyers reacted to oversold conditions. Still, any upside appears to be limited, and the cryptocurrency could face resistance at $33,000 and $35,000.

Momentum signals remain negative on the daily, weekly and monthly charts, which typically leads to a period of low or negative returns. Further, BTC is on track for its first-ever consecutive seven-week decline, according to Coinbase price data provided by TradingView, dating back to 2014. That's also a sign of negative price momentum.

For now, BTC is approaching lower support near its 200-week moving average, which is now at $21,800. Immediate support is between $27,000 and $30,000, which could stabilize price action over the next few days.

Also, on Thursday, short-term countertrend signals appeared on the charts, which typically leads to a brief price bounce.

The relative strength index (RSI) on the weekly chart is the most oversold since March 2020, although strong resistance and negative momentum suggests limited upside over the next few months.

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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.

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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.

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