Bitcoin stabilizes after sell-off, faces resistance near 53k

Bitcoin (BTC) is rising from oversold levels as traders digest the news from Tesla’s announcement on Wednesday which triggered a near 15% price drop. The cryptocurrency held support around $46,000 and is currently trading back above $50,000 at the time of writing.

However, long-term momentum continues to weaken which could limit price recoveries this weekend and into next week.

• Bitcoin remains in a consolidation phase with frequent drawdowns, which was in effect for several months before the Tesla announcement.

• The relative strength index (RSI) on the four-hour chart registered an oversold signal on Thursday, which could keep buyers active towards $53,000-$54,000.

• On the daily chart, the RSI is not yet oversold. Meanwhile, the weekly RSI has receded from extreme overbought levels and is now neutral. This means stronger support around $42,000 should not be ruled out.  

• Additionally, bitcoin on May 10 made a lower price high on the daily chart around $59,000, which suggests the short-term trend is weakening.

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

Source: TradingView