Bitcoin (BTC) returned above the $30,000 level on Tuesday after a volatile trading session. Buyers quickly stepped in as oversold conditions appeared on intraday charts. The next level of resistance is seen around $36,000, which could limit further upside.
The world’s largest cryptocurrency by market value was trading around $34,000 at press time and is up 9% over the past 24 hours.
The near-10% price drop on Tuesday was typical of a shakeout, which signals a period of market turmoil when sellers capitulate.
Bitcoin’s two-month downtrend appears exhausted after the relative strength index (RSI) on the daily chart registered a higher low. This means buyers could remain active towards upper resistance levels.
The RSI on the four-hour chart is not yet overbought, although bitcoin is still below the 100-period moving average, suggesting resistance could be found at $36,000.
Stronger resistance is seen at $40,000 which is near the upper bound of a month-long range.