Bitcoin (BTC) has been rising for about a week, gaining 20+%, but now the price may have entered the overbought zone
What the 200-day SMA signals
Bitcoin (BTC) is up an impressive 22% over the last week and hit 2023 highs today at $21,356. In addition, the technical picture also points to a number of important bullish events.. So, recently BeInCrypto analysts wrote that the weekly RSI made a bullish breakdown of the 721-day trend line. The Hash Ribbons indicator also gave a signal to buy Bitcoin for the first time in 5 months.
All this may indicate that the bear market for BTC has already found a bottom and a new uptrend is now forming.
As Glassnode analysts write, the 200-day SMA is often considered the “litmus test of macrotrends in the market.”. This week's rally pushed the price above this key level.. This has been seen in previous cycles, they add.
“The Bitcoin market often exhibits surprisingly persistent cyclical patterns.. In this cycle, BTC spent 381 days under the 200-day SMA, only 5 days behind the 2018-19 bear market of 386 days.”
However, the price is still far from the longer-term 200-week MA, which is currently running at $24,566.
RSI at the highs
Amid the current bullish market sentiment, one indicator urges buyers to be cautious, signaling that BTC is overbought. This is the Daily Relative Strength Index (RSI).. It is now on the verge of 90, which is a very high value.. Usually, after the RSI reaches these levels, a pullback begins.
This was tweeted by a popular crypto trader and investor called The Wolf Of All Streets (@scottmelker). According to him, the market has reached the 90 mark several times, and often this is followed by a correction, and only then – a new spurt to the north.
“The last time the index significantly exceeded this mark (94) during the top of 2017 in the region of 20 thousand. The last time the index touched 90, the price pulled back from the 40k area.. in the region of 30 thousand. and only then broke through to 65 thousand.
Source: Twitter
Meanwhile, in terms of market sentiment, BTC has returned to neutral territory, as evidenced by the Fear and Greed Index.. The indicator value for the first time since April 2022 exceeded the 50 mark:
Source: Twitter BTC Price Outlook
At the time of writing, Bitcoin was trading in the $21,275 area after three days of consolidation.. Recently, price activity has fallen, but analysts continue to be optimistic about the future of cryptocurrency.
Source: BeInCrypto
According to the results of technical analysis, the next resistance is located at the level of $24,000. Price hasn't been here since August 2022. Meanwhile, support is noted in the region of $18,000.
As popular crypto analyst @CredibleCrypto comments, many have been caught off guard by the sudden rise in price and now they are waiting for a fall towards the 18k mark to enter the market.. However, in his opinion, they may not wait for this, and BTC will continue to climb towards the level of 25 thousand without any significant pullbacks.. and higher:
Source: Twitter
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