Bitcoin (BTC) sellers were active during Asia hours after China’s central bank declared cryptocurrency related business illegal. BTC slipped below $42,000 and is down about 3% over the past 24 hours. Initial support is seen at $40,000, which could stabilize the pullback.
A series of lower price highs from the $50,000 resistance level reflects slowing upside momentum this month. The intermediate-term uptrend has weakened, although short-term buyers could defend lower support levels into the weekend.
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The relative strength index (RSI) on the daily chart is rising from oversold levels last week, which could limit additional selling.
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The 100-day moving average at $40,000 could provide short-term support. If broken, the next level of support is seen around $36,000, which is the middle of a four-month price range.
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Resistance remains strong above $46,000 as buyers continue to take profits.
Damanick does not own cryptocurrencies.
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