Bitcoin Holds Short-Term Support, Faces Resistance at $40K
Bitcoin (BTC) is stuck in a consolidation phase after a volatile May. A nearly 13% rise on Wednesday was short-lived as buyers took profits. There is strong resistance near $40,000 despite oversold readings on the daily chart.
Bitcoin registered a series of lower price highs over the past two weeks, although buyers have defended support at around $34,000 and $30,000.
The cryptocurrency was trading at about $37,500 at press time.
The relative strength index (RSI) on the daily chart is improving from an initial oversold reading on May 19, which suggests the downtrend from May is stabilizing.
However, there is strong overhead resistance, which could limit price rallies beyond $40,000.
The weekly chart is not yet oversold, although there are initial signs of downside exhaustion. That means buyers and sellers are at a stalemate until a decisive break above $40,000 or below $30,000 is confirmed.
The longer-term trend is weakening following extreme overbought signals in March. For now, upside remains limited into the weekend given the intermediate-term downtrend.
