Bitcoin (BTC) appears to be oversold on the charts, which typically precedes a short-term upswing in price.
The cryptocurrency declined toward $25,400 before quickly recovering back above the $27,000 support level. BTC is down by 2% over the past 24 hours and declined by 20% over the past week.
The relative strength index (RSI) on the daily chart is the most oversold since January, which preceded a 30% relief rally. This time, however, negative long-term momentum could cap upside moves around the $35,000 resistance level.
Further, BTC registered a countertrend reversal signal on the daily chart, per the DeMARK indicators. That means selling pressure could wane over the next few days as buyers return from the sidelines. Another daily close above $30,000 would confirm the countertrend signal, although there is a low chance of significant upside from here.
