Bitcoin declines from $40K resistance, support at $34K

Bitcoin (BTC) had a sharp 10% pullback after approaching the $40,000 resistance level on Monday. The cryptocurrency is holding initial support above $36,000 at press time and is up about 25% over the past week.

Lower support is seen around $34,000 which could stabilize the current pullback.

Bitcoin four-hour price chart shows short-term support and resistance levels with RSI.

Source: TradingView

• The relative strength index (RSI) on the four-hour chart reached extreme overbought levels over the weekend as bitcoin rallied. Overbought conditions typically precede price declines as buyers take profits.

• The RSI on the daily chart is approaching overbought levels, which could limit bitcoin’s upside beyond $40,000 resistance.

• Although the intermediate-term downtrend is improving, bitcoin remains in a consolidation phase between $30,000 and $40,000, which suggests buyers and sellers are in a stalemate despite occasional rallies and selloffs.