Bitcoin Recovers, Crosses $40K Resistance, but Is It Overbought? – The air is tense; emotions are high; Bitcoin is rallying up for another bull run. Following Monday’s 10% pullback, BTC is back in the game and has surpassed the $40,000 resistance level.
As of now, the resistance level stands at $42,692. Almost two weeks back, Bitcoin touched its support level of $29,088 and has started on an upward rally since.
Among the bullish sentiment, fear that the currency is overbought also exists. This could mean that a correction perhaps later next week could take place as well as triggering some profit taking after an almost 25% rise over the past week.
A chart of the crypto’s relative strength index (RSI) shows this better.
Here, it is clear that the BTC has crossed over to an overbought stage. When a cryptocurrency is overbought, it is believed to be trading at a level above its intrinsic or fair value. This is usually reflective of short-term growth and hints at an upcoming market correction.
Considering that, is the Bitcoin price rally going to be a short-lived one?
It doesn’t seem so, as while the coin’s price increases, its RSI has risen to a high level and then now seems to be returning to more neutral levels. Fingers crossed, Bitcoin fans!
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Financial Watch. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Be the first to comment