[ad_1]
This week’s CPI announcement was a significant relief for Bitcoin investors, as declining inflation would likely lead to a bullish trend for risk assets. However, there is still room for caution from a technical analysis standpoint, as the price has yet to break any major resistance level.
Technical Analysis
By: Edris
The Daily Chart
On the daily timeframe, the price has finally reached the $18K resistance area and is currently trying to break it to the upside. The 50-day moving average, located around the same price, is providing additional resistance at the moment.
It’s important to note that a bullish breakout from this significant resistance level could likely lead to a further rally towards the higher boundary of the large descending channel around the $20K mark.
In opposition, if the price gets rejected to the downside, a rapid decline toward the $15K support area would be probable, as there would be no obstacle to holding the price on this timeframe.
The 4-Hour Chart
Looking at the 4-hour chart, the price has finally broken above the $17K mark and is testing the $18K resistance. A breakout from the mentioned level could pave the way for a surge toward $21K in the short term.
However, the RSI indicator is already showcasing a red flag, as the indicator is deep into the overbought area, currently trending around the 80% mark. This signal could point to a pullback or bearish reversal in the coming days, leading to a likely retest of the $17K area.
Considering the relatively high likelihood for the Feds to ease back on the rate hikes and the price’s recent bullish momentum, a breakout above $18K would be the more probable outcome.
The RSI overbought signal should not be taken lightly, especially until the price still trades below the mentioned $18K resistance level.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.
[ad_2]
Source link