Bitcoin Rallies From Oversold Levels; Resistance Around $56K

Bitcoin Rallies From Oversold Levels; Resistance Around $56K

Bitcoin (BTC) is roughly 16% higher off the weekend low around $47,000 as buyers responded to oversold conditions. The cryptocurrency was trading around $54,700 at the time of writing. The next level of resistance is around $56,000.

  • The relative strength index (RSI) on the hourly chart is now the most overbought since the April 14 when BTC reached an all-time high around $64,800.
  • BTC is approaching resistance around $56,000 which is roughly a 50% retracement of the prior two-week downtrend.
  • Initial support on the hourly chart is at the 50-period volume weighted moving average around $51,800.
  • The weekly RSI shows considerable loss of upside momentum similar to June 2019 which preceded a corrective phase. For now, short-term oversold conditions should support brief price recoveries, albeit vulnerable to sharp swings.
  • “Bitcoin’s corrective phase should run its course within 2-3 months. Support is near $42,000 as a gauge of downside risk within the long-term uptrend,” wrote Katie Stockton of Fairlead Strategies who also points to sell signals on the weekly BTC chart.
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