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Bitcoin could find its footing if it holds the $34,000 level, a technical analyst says

Summary List Placement Bitcoin could find its footing after its recent price decline if it holds $34,000 as support, according to technical analyst Katie Stockton of Fairlead Strategies. Oversold conditions are apparent from short and medium term perspectives, according to Stockton. If Bitcoin is able to close above its 20-day moving average,...

Bitcoin Bubble

Summary List Placement

  • Bitcoin could find its footing after its recent price decline if it holds $34,000 as support, according to technical analyst Katie Stockton of Fairlead Strategies.
  • Oversold conditions are apparent from short and medium term perspectives, according to Stockton.
  • If Bitcoin is able to close above its 20-day moving average, it could set up for a surge to its 50-day moving average near $46,000, Stockton said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin’s recent price decline could reverse if the cryptocurrency manages to hold a key support level near $34,000, according to a Tuesday note from technical analyst Katie Stockton of Fairlead Strategies.

Bitcoin has tumbled more than 10% this week, in part due to a report that the US government was able to clawback a portion of the $4.4 million ransom payment made by Colonial Pipeline to the hacker group known as DarkSide.

While the price action has been weak in bitcoin since it peaked in mid-April, Stockton noted that it has entered oversold conditions in both the short- and medium-term, which could set the cryptocurrency up for a sizable bounce higher.

Those oversold conditions give bitcoin “a better chance to find its footing,” according to Stockton. If bitcoin is able to reclaim its 20-day moving average near $36,000, it would be a short-term bullish development that sets the stage for a surge back to its 50-day moving average, which is currently around $46,000.

A move to those levels represents potential upside of 45%. Bitcoin is currently trading at about $31,000 as of Tuesday morning.

But if bitcoin notches a decisive breakdown below $34,000, marked by consecutive daily closes below that level, then weakness could continue to linger. “Short-term momentum has deteriorated,” Stockton observed. 

“As it stands, we would look for bitcoin to establish a lower high versus April without damaging the longterm uptrend,” Stockton concluded.

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