The oversold signal on Thursday preceded in a near 8% rise in bitcoin (BTC). The next level of resistance is around $55,000-$56,000 which could limit upside moves.
- Previous oversold signals on the hourly relative strength index (RSI) resulted in 5%-8% price recoveries. However, sellers have been active at key resistance levels this month.
- Bitcoin’s uptrend continues to weaken after breaking below trend support on the four-hour chart.
- The hourly chart remains in a downtrend defined by lower price highs as traders continue to take profit from intraday recoveries.
- So far, buyers are defending support around $50,000. Additional selling pressure could stabilize around lower support at $42,000.
BTC held support around $50K and is approaching resistance around $56K.