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BTC $43502.26 (6.13%)
ETH $3030.83 (9.35%)
USDT $1.00 (0.06%)
BCH $542.24 (5.79%)
BSV $146.53 (0.88%)
LTC $159.87 (5.55%)
BNB $377.20 (8.38%)
ADA $2.23 (12.2%)
DOGE $0.22 (12.7%)

BTC Recovers, Crosses $40K Resistance, but Is It Overbought?

BTC Recovers, Crosses $40K Resistance, but Is It Overbought
  • After last monday’s 10% pullback, BTC is recovering and has crossed $40,000.
  • Fear that the currency is overbought is alarming investors.
  • However RSI seems to be adjusting itself.

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.

https://s3.tradingview.com/snapshots/u/U2qYoZ1T.png

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.

https://s3.tradingview.com/snapshots/r/RQFgWMXx.png

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!

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Lisa is excited about all things tech. She devotedly follows blockchain and crypto updates, sharing her passion through writing about it. She is a regular contributor for cryptocurrency news and articles.