Bitcoin Oversold Bounce Faces Resistance at $40K-$43K

Long-term momentum remains very weak and BTC is at a critical point.

Bitcoin (BTC) rose from deeply oversold levels over the past two days, indicating renewed buying after a sharp sell-off. The cryptocurrency faces initial resistance at $40,000-$43,000, which could stall the current price bounce.

BTC was trading around $38,000 at press time and is up 4% over the past 24 hours.

The relative strength index (RSI) on the daily chart is rising from extreme oversold levels, which could keep buyers active this week. On the weekly chart, the RSI is approaching oversold territory, similar to July 2021, which preceded a strong price rally.

Still, momentum signals remain very weak, indicating limited upside from here. That means buyers will need to make a decisive move above $40,000 to signal a recovery phase.

For now, the downtrend from November remains intact with immediate support at $37,000 and lower support at $30,000.

BY: Damanick Dantes

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.