The leading cryptocurrency, Bitcoin [BTC], completed recovery from Monday’s 10% pullback and is now re-testing the $40k resistance level. The cryptocurrency appears overbought, which could trigger some profit-taking after a near 25% rally over the past week.
Lower support is seen around $34k to $36k, which is somewhere in the middle of a two-month range.
The RSI [Relative Strength Index] on the 4-hour chart is declining from an extreme overbought reading earlier on Monday. A lower high on the RSI indicates a bearish divergence, that might stall bitcoin’s short-term uptrend.
Bitcoin initial support is seen at the 50-period moving average on the 4-hour chart, presently at $36k. Lower support is seen around $32k to $34k, which could stabilize a pullback.
The intermediate-term trend is improving with a big loss of downside momentum over the past few weeks. Buyers could remain active at lower support levels, although a breakout over $40k-$45k is required to resume the long-term uptrend.