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!