Bitcoin Faces Initial Resistance at $46K; Support at $42K

On intraday charts, Bitcoin (BTC) appears to be overbought, which usually leads to a price retreat. Initial resistance for the cryptocurrency is near $46,000, which is the top of a three-month trading range. Pullbacks could be stabilized if support is found between $40,000 and $42,000.

At press time, BTC was trading around $44,400, up 5% over the previous week.

In comparison to the June 2021 bottom of about $28,800, BTC established a higher price low on the weekly chart. This year's cycle low, $33,100, was set on Jan. 24, signaling increased purchasing vigor. Furthermore, momentum signs are about to turn positive, indicating that a short-term rescue rally is possible.

A stronger level of resistance can be found at $50,996, which represents a 50% retracement of the previous downturn. BTC's ascent could plateau at that point, similar to what happened in September 2021. Seasonal strength between April and May, on the other hand, may keep buyers active this time, albeit within a year-long trading range.

Momentum signs on the monthly chart are still negative. Because of substantial overhead resistance emerging from the April and November price peaks, upward is limited.