Bitcoin Rangebound Near $50K Resistance; Support at $40K

Bitcoin (BTC) is stuck in a sideways range as the short-squeeze rally takes a breather. Buyers could start to take profits ahead of the $50,000 resistance level, although support around $40,000-$42,000 could stabilize a pullback.

The worlds largest cryptocurrency by market value was trading around $46,900 at press time and is roughly flat over the past week.

• The relative strength index (RSI) on the daily chart is declining from overbought levels, which typically precede price pullbacks. The RSI has a slight negative divergence with price as upside momentum wanes.

• Bitcoin is trading around the 200-day moving average and will need to break out of a short-term range to resume the uptrend.

• Support is seen around the top of the prior two-month consolidation phase between $40,000 and $42,000. A successful re-test of these levels could yield further upside towards $50,000 and $55,000.