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Bitcoin Approaches Support Zone at $37K-$40K

Bitcoin (BTC) is not yet oversold on the daily chart, although selling pressure could wane over the next few days. Buyers will need to maintain support around $37,500 to sustain the recovery from Jan. lows.Read MoreFeedzy

Bitcoin (BTC) is extending its pullback that began on March 28 after buyers failed to break above the $48,000 resistance level.

The cryptocurrency is not yet oversold, although lower support at $37,500 and $40,000 could stabilize the down move.

BTC was trading around $40,500 at press time and is down 5% over the past 24 hours. Countertrend signals, however, are roughly two days away from an inversion (selling exhaustion), per the DeMARK indicators.

The relative strength index (RSI) on the daily chart is approaching oversold levels, which could pause the current price drop. Still, oversold readings could persist for a few weeks, similar to what occurred earlier this year.

On the weekly chart, momentum signals are still positive. That means BTC’s recovery from January lows remains intact, so long as buyers can maintain support above $37,500.

Despite short-term price rises, further upside beyond $50,000 could be challenging given negative momentum signals on the monthly chart, similar to what occurred during the 2018 crypto bear market.

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