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Bitcoin sell-off could stabilize around 42k support

Bitcoin sell-off could stabilize around 42k support
CoinDesk Analysis TeamCoinDesk Analysis TeamCoinDesk

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.

Bitcoin

Four-hour bitcoin chart shows support and resistance levels with RSI.

Source: TradingView

Author

CoinDesk Analysis Team

CoinDesk is the media platform for the next generation of investors exploring how cryptocurrencies and digital assets are contributing to the evolution of the global financial system.

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