Mon, Mar 27, 2023 @ 19:50 GMT
HomeContributorsTechnical AnalysisBTCUSD Hits Resistance as Rebound in Danger of Becoming Overstretched

BTCUSD Hits Resistance as Rebound in Danger of Becoming Overstretched

BTCUSD is struggling to maintain positive momentum on Wednesday as the week-long rally appears to have stumbled after getting caught between the 50-day moving average (MA) and the 161.8% Fibonacci extension of the January-March upleg at 23,505.65. The price earlier hit an intra-day peak of 23,940.99 – a one-month high. But the grind higher is slowing amid the heavy resistance region.

Still, the momentum indicators suggest there is scope for a further recovery, even though there is also the risk of a downside correction over the near-term horizon. The RSI continues to climb above 50 but has yet to reach the 70 overbought level, while the stochastics have already entered the overstretched territory. Both the %K and %D lines are pointing up and a bearish cross between the two is not imminent, suggesting that any negative correction would be several sessions away.

If the price is able to convincingly break above the 161.8% Fibonacci, the next major resistance point isn’t likely to be met until the 30,000 psychological level. Overcoming this hurdle too would clear the path for the 200-day MA just above 35,200.

However, if the upswing loses further steam and the price turns lower, there should be some support at the 200% Fibonacci, which corresponds with the 1½-year low of 17,592.78 set in June. If this trough is breached, the bears would probably next target the 223.6% Fibonacci of 14,060.59.

Overall, the short-term bias remains bullish for now even if there is some risk of a downside reversal. But in the bigger picture, BTCUSD would likely need to climb above 30,000 for the current bearish outlook to switch to a more neutral one.
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