BTCUSD (Bitcoin) has been edging higher after breaking above its prolonged sideways pattern in early 2023. However, the king of cryptocurrencies is currently trading within a range as its rebound got rejected at the four-month high of 21,640.
The momentum indicators currently suggest that the recent rally could be overstretched as both the RSI and the stochastic oscillator are currently well within their overbought territories. Hence, a potential downside correction may be on the cards.
Should buying pressures persist, the digital coin could test the recent resistance of 21,640, which is also a four-month high. Conquering this barricade, the bulls could then aim for the September peak of 22,775. A break above that level could trigger an advance towards the 25,200 barrier.
On the flipside, if the price reverses lower, the recent support of 20,383 could curb initial declines. Sliding beneath that floor, the price may descend to test the December resistance of 18,370, which could act as support in the future. Even lower, the 16,252 hurdle might prove to be a tough one for the price to overcome.
Overall, although some overbought signals have emerged, BTCUSD seems to be holding its ground. Therefore, for the rally to resume, the price needs to break above the recent rejection zone.
