Bitcoin (BTC) has had a bullish start to the week, but the momentum could wane in the next few days, technical studies indicate.
The leading cryptocurrency rose to a two-month high of $8,130 on Bitfinex today, having witnessed an inverse head-and-shoulders breakout last week.
The 40 percent rally from the seven-month low of $5,755 reached on June 24 has put the bulls back in a commanding position. Hence, further gains could be on the cards, albeit after a brief pause or a price pullback as a key technical indicator is flashing overbought conditions.
At press time, BTC is changing hands at $8,100 on Bitfinex.
Notably, the relative strength index (RSI), one of the most widely used momentum indicators, jumped above 70.00 (overbought zone) earlier today and is currently located at 74.56 – its highest level since December.
So, it could be said that bitcoin is at its most overbought level in seven months.
As a result, the cryptocurrency may find it hard to gain a foothold above the immediate resistance of $8,140 (pennant resistance) in the next few days and could see a minor price pullback.
That said, a technical correction, if any, will likely be short-lived as the other tools are biased towards the bulls. For instance, the 5-day and 10-day moving averages (MAs) are trending north, indicating a bullish setup.
Meanwhile, the short duration charts are also calling a further price rally.
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://www.coindesk.com/indicator-suggests-bitcoins-8k-rally-is-overstretched/
Peace, Abundance, and Liberty Network (PALnet) Discord Channel. It's a completely public and open space to all members of the Steemit community who voluntarily choose to be there.Congratulations! This post has been upvoted from the communal account, @minnowsupport, by james777 from the Minnow Support Project. It's a witness project run by aggroed, ausbitbank, teamsteem, theprophet0, someguy123, neoxian, followbtcnews, and netuoso. The goal is to help Steemit grow by supporting Minnows. Please find us at the
If you would like to delegate to the Minnow Support Project you can do so by clicking on the following links: 50SP, 100SP, 250SP, 500SP, 1000SP, 5000SP.
Be sure to leave at least 50SP undelegated on your account.