Bitcoin Remains Under Pressure, Faces Resistance At $45K

20 May 2021

After yesterday’s 14% plunge, bitcoin (BTC) clawed back to around $40,000 during Asian trading hours on Thursday, but still remained under pressure.

Sharp price swings have become the norm this week as the broader uptrend weakens in a way that is similar to what happened to bitcoin in 2018 at the start of a bear market.

  • Bitcoin faces resistance at around $45,000, defined by the 50-period volume weighted moving average on the four-hour chart.
  • The relative strength index (RSI) remains oversold on the four-hour chart, although buyers are on the sideline as volatility rises.
  • Bitcoin is stabilizing around the 200-day moving average. A decisive break below $40,000 would signal a trend shift from bullish to bearish.
  • Lower support is seen at around $27,000, which is a roughly 60% retracement of the March 2020 low.
  • “$27,000 may be a more realistic gauge of support given the lack of oversold buy signals, which is probably a function of how fast the pullback unfolded,” Katie Stockton, managing partner of Fairlead Strategies, said in an interview with CoinDesk.
Four-hour bitcoin chart shows support and resistance with oversold RSI.
Source: TradingView

Sharp drawdowns of about 40% are common toward the end of a bull market, similar to 2017 and 2018.

Chart shows the percentage decline in bitcoin from peak to trough.
Source: Koyfin
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