Bitcoin Price Key Highlights
- Bitcoin price has been on a tear in the past few days and is approaching the record highs close to $5000.
- Profit-taking could happen at this level before bitcoin heads further north, and the potential pullback area is marked below.
- Technical indicators are hinting at rally exhaustion but the longer-term climb could stay intact.
Bitcoin price is within striking distance of its record highs and traders could book profits at this level before pushing for more gains.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This means that the uptrend is more likely to continue than to reverse.
A rising trend line can be drawn to connect the lows of bitcoin price action since mid-September and this could provide a nearby support zone in the event of a pullback. This also lines up with a resistance turned support level, so buy orders could be located in this region.
Stochastic is already indicating overbought conditions, which means that buyers might need to take a break before pushing higher. RSI is on the move up but is also in the overbought level, so bearish pressure could return. If the trend line and area of interest keep losses in check around $4400-4500, bitcoin price could gain more bullish momentum to smash the record highs and create new ones.
Market Factors
US banks were closed in observance of Columbus Day on Monday but that didn’t stop equity indices from returning some of their recent gains ahead of earnings reports. With these event risks lined up, it’s no surprise that traders seeking higher returns are turning to bitcoin instead.
However, analysts are warning of higher volatility ahead as the cryptocurrency approaches another fork. If all goes well like it did back in August, bitcoin price could be in for another leg higher but more complications could lead to a larger correction.
The next juncture is scheduled for mid-November but traders are already positioning way ahead of the event. For more on potential upside targets, here’s an update on the Fib extension levels.
