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Bitcoin Holds Short-Term Support; Faces Resistance at $40K
BTC re-tested minor support around $30,000 over the weekend, but stronger support is seen around $27,000.
Updated Mar 6, 2023, 3:21 p.m. Published May 24, 2021, 11:29 a.m.
Bitcoin (BTC) remained under pressure over the weekend as traders react to China’s latest news about tightening crypto regulation. The cryptocurrency is down about 36% month to date and was trading around $37,000 at the time of writing. Price recoveries should remain limited to $40,000 as the broader uptrend weakens.
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Slowing momentum has been the dominant theme this year as bitcoin failed to maintain all-time highs. Long term sell signals were in place before headlines accelerated price declines, which preceded a gradual and then sudden capitulation of long positions.
- The relative strength index (RSI) on the four-hour chart has struggled to break above neutral over the past week. In a downtrend, oversold readings can persist for extended periods, which suggests a lack of significant support levels.
- Bitcoin re-tested minor support around $30,000 over the weekend, but stronger support is seen around $27,000.
- BTC is trading below the 100-day moving average and the correction does not appear exhausted at current levels. This means sellers should remain active as bitcoin struggles to break above $40,000.
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
What to know:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
- Several recent institutional developments, including Vanguard's crypto ETF policy reversal and Bank of America's greenlighting of crypto allocations, have contributed to bitcoin's rebound from recent lows.
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