Bitcoin Sell-Off Could Stabilize Around $42K Support

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BTC remains under pressure and could find lower support near $42K as long-term momentum wanes.

Sellers remained active on Wednesday as bitcoin (BTC) dropped below $50,000 after Tesla halted acceptance of payments for new vehicles in the currency.

The cryptocurrency was trading around $49,400 at press time and could find lower support around $42,000.

Long-term momentum continues to weaken during several months of consolidation. BTC remains under pressure after reaching the upper bound of a three-year price channel.

  • The relative strength index (RSI) on the four-hour chart is oversold similar to April 25 which preceded a price recovery.
  • However, the RSI is not yet oversold on the daily chart. This means bitcoin could trade lower towards $42,000 support.
  • Bitcoin returned below the 100-day moving average which created resistance around $53,600.
  • Over the short term, higher volatility and frequent drawdowns could discourage buyers. For now, the long-term trend remains intact above $42,000.
Screen Shot 2021 05 13 at 7.10.04 AM LearnCrypto Powered By Wyckoff SMI 2023
Four-hour bitcoin chart shows support and resistance levels with RSI.
Source: TradingView

by: Damanick Dantas

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