Bitcoin’s rally is showing no signs of abating.
Prices surged to record levels on the CoinDesk Bitcoin Price Index (BPI) yesterday, with the world’s largest cryptocurrency clocking a new all-time high of $6,306.58. With the push, bitcoin passed its previous high of $6,183 set on Oct. 21. At press time, the bitcoin-U.S. dollar (BTC/USD) exchange rate is $6,218.
The above chart shows:
- Bullish rising channel breakout (bitcoin price closed above the upper end/ceiling of the rising channel on Sunday).
- However, a move above 100 percent Fibonacci extension level of $6,196.81 was short lived. The first attempt to cut through the key Fib. level had failed on Oct. 21.
- The relative strength index (RSI) is close to overbought level, but it is still sufficiently away from the October highs.
- Bitcoin is up 500 percent on a year-to-date basis. Thus, there is always a possibility of a healthy technical correction.
- Only a break below the rising trend line (dotted blue line) would warrant caution.
- On the higher side, the psychological level of $6,500 could be put to test if the cryptocurrency spends the next 12 hours or more building a base around $6,200 levels.
Bearish Scenario: Only a drop below 10-day MA in the next 24 hours would open doors for a re-test of last week’s low of $5,376.
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