Bitcoin Is Stuck Near $46,000 After Sell-Off

Bitcoin Tries To Rebound After Major Sell-Off

Bitcoin is currently trading near the $46,000 level after the recent sell-off while other cryptocurrencies have also stabilized after recent volatility. Ethereum is currently trying to settle below $3,500 while Dogecoin is testing the support level at $0.2520.

Bitcoin found itself under strong pressure after it became legal tender in El Salvador. It looks that it was a typical “sell the news” event, amplified by traders’ protective stop orders which fell like dominoes.

It should be noted that Bitcoin failed to gain upside momentum right after the major sell-off, and it looks that the size of this sell-off had a negative impact on traders’ mood. However, crypto markets are known for their volatility, and Bitcoin should have good chances to move back to recent highs in case it manages to stabilize near current levels.

Technical Analysis

Bitcoin received support near the 50 EMA at $45,200 and is trying to settle back above $46,000. RSI has moved away from the overbought territory, and there is plenty of room to gain upside momentum in case the right catalysts emerge.

If Bitcoin manages to settle above $46,000, it will get to the test of the next resistance level near $47,000. A move above this level will open the way to the test of the resistance at the 20 EMA at $48,000.

In case Bitcoin settles above the 20 EMA, it will move towards the psychologically important $50,000 level. A successful test of this level will open the way to the test of the next resistance at $51,500.

On the support side, Bitcoin needs to get back below $46,000 to have a chance to develop downside momentum in the near term. The next support level is located at the 50 EMA at $45,200. A move below the 50 EMA will push Bitcoin towards the support at $44,000. In case Bitcoin declines below this level, it will head towards the support which is located near the recent lows at $42,600.

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