Bitcoin buyers are in profit taking mode given strong overhead resistance.
Bitcoin (BTC) selling continued during Asia hours as buyers failed to hold initial support at $34,000. Lower support is seen at $30,000 which could stabilize the current sell-off.
The downtrend since April has limited price recoveries and kept bitcoin in a tight range between $30,000 and $40,000 over the past month. However, momentum signals suggest selling pressure has weakened since the May correction which could keep buyers active at support.
Bitcoin was trading around $32,000 at press time and is up about 4% over the past week.
- The relative strength index (RSI) on the daily chart registered a series of higher lows since May 19. This indicates a bullish divergence which could stabilize the intermediate term downtrend in price.
- Typically, a bullish divergence precedes a price bounce. It’s possible that bitcoin’s 20% price rise from the June 22 shakeout low around $29,000 completed the divergence signal.
- Bitcoin will need to break above the 50-day moving average around $37,000 to encourage further upside beyond $40,000.
- For now, buyers continue to take profits given strong overhead resistance on the chart.