Bitcoin has appreciated into a resistance zone around the $49,000 area (red shaded horizontal). Moreover, the daily RSI has moved into overbought territory (green rectangle). It is unlikely that the indicator will stay overbought for long, suggesting that the overhead resistance level may be a key reaction level for the cryptocurrency.
Market participants may be turning cautious as potential profit taking looms. Recent bitcoin strength is attributed to US approval of spot Bitcoin ETFs and a predominant risk-on sentiment with the SPX500 and US30 trading at or near all-time highs.
Given that the wider primary trend for Bitcoin is up, any pullback from current levels is likely to be of interest to the crypto-bulls who will be looking to buy back in at better prices.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.