Bitcoin slips below $40k, support around $34k

Bitcoin (BTC) buyers are taking profits after a rally toward $42,000 over the weekend. The cryptocurrency appears overbought and could find support around $34,000, which is the midpoint of a two-month range.

The intermediate-term uptrend is improving after a near 30% rally from the July 20 low around $29,000. Buyers could remain active at lower support levels given the loss of downside momentum over the past month.

Bitcoin was trading around $39,500 at press time and is down 4% over the past 24 hours.

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 registered a series of lower highs, which suggests the short-term uptrend is weakening.

• The RSI is not yet oversold and could encourage further profit taking towards initial support around $34,000.

• Bitcoin returned below the 100-day moving average after overbought signals appeared for the first time since April, which preceded a sell-off.

• The weekly chart is holding support and could signal a return of positive momentum this month.