Bitcoin Relief Bounce Faces Resistance at $33K-$35K
Buyers are reacting to oversold conditions, although upside appears limited.
May 31, 2022 at 6:19 p.m. UTC
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Bitcoin (BTC) broke above a short-term downtrend over the weekend and reclaimed the $30,000 price level. The cryptocurrency is experiencing a relief bounce after several weeks of oversold readings on the charts. Still, resistance at $33,000 and $35,000 could stall the upswing in price.
BTC was trading at $31,900 at press time and is up by 4% over the past 24 hours.
The relative strength index (RSI) on the daily chart has risen from oversold levels over the past two weeks, which supported the buildup in price momentum. The 14-day RSI is currently neutral and will need to remain above 50 in order to sustain the relief bounce.
On the weekly chart, the RSI is the most oversold since March 2020, which preceded a crypto rally. This time, however, the significant loss of long-term momentum suggests upside could be limited.
For now, price action could stabilize above the $27,000-$30,000 support zone, which could delay additional breakdowns on the chart.
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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.