Bitcoin has seen one of its first strong pullbacks in the time since the rally that took it to $24,200.
The rejection here proved to be quite intense as it triggered a selloff that took the cryptocurrency to a low of $22,000 this morning.
Support here was strong and helped slow its climb.
The next trends will likely depend on Ethereum Code sustained response to this key level.
One trader wrote in a tweet that several indicators now suggest that a downward move for the entire market is imminent.
Bitcoin and the entire cryptocurrency market have been rocked by immense volatility in recent days, with selling pressure above $24,000 causing the benchmark cryptocurrency to experience a massive sell-off.
BTC has found strong support around $22,000 that can continue to support its price action, but medium-term trends will largely depend on its continued reaction to this level.
One trader now notes that some indicators suggest that the bitcoin rally is still overextended and that the cryptocurrency may be in a position to see some serious short-term losses.
Bitcoin is losing momentum – selling pressure is growing
Currently, Bitcoin is trading at $22,600, which marks a slight recovery from the daily lows of $22,000.
The cryptocurrency could now form a range between these lows and $23,000, with the short-term trend depending on which of these two levels is broken first.
Analyst: BTC shows signs of overheating
Despite this retracement, one analyst believes that Bitcoin could still face further downside.
He notes that the cryptocurrency’s weekly RSI and Stoch RSI both indicate that the cryptocurrency is overbought at the moment.
„BTC – Weekly RSI and Stoch RSI clearly overbought. This is a trending market and the oscillators may remain overbought – but I am just being cautious here…. Local top?“
The coming days should shed light on where the entire market is headed in the medium term, as it may be almost entirely dependent on Bitcoin.