Upside appears to be limited despite short-term relief buying.
Bitcoin is stabilizing around the 200-day moving average at $46,000 after a sharp sell-off on Tuesday. The cryptocurrency is down about 8% over the past 24 hours, with sellers in control of the $50,000 resistance zone.
Upside momentum has slowed over the past month, although buyers were able to defend support around the $42,000 breakout level achieved Aug. 6. Buying could be limited, however, as overhead resistance remains strong around the $55,000-$60,000 range.
The relative strength index (RSI) on the four-hour chart is the most oversold since the August 6 breakout above $42,000. This could encourage buyers to return around current support levels.
However, upside appears to be limited as the RSI on the daily chart is declining from overbought levels last month.
A lower price high from April is likely as volatility returns this month, limiting buyer strength in the aftermath of Tuesday’s selloff.