Bitcoin's price action signals potential weakness, with the weekly RSI at 78.49 in overbought territory and a bearish divergence forming on the daily chart's RSI. The rising wedge pattern on the daily timeframe further supports a bearish outlook, indicating momentum loss as price approaches the wedge's apex. A short-term correction appears likely, with a possible revisit of the previous all time high.
Weekly Analysis
The weekly timeframe suggests overextension in price action, hinting at a correction.
Daily Analysis
Weekly Analysis
- RSI (78.49): Overbought conditions indicate that Bitcoin's recent upward movement may have pushed prices into an unsustainable range. Historically, such levels often precede corrections.
- Stochastic RSI (98.69): Despite being in the oversold zone, the proximity of the K line to the D line suggests a possible momentum shift. If this crossover occurs, it could confirm waning bullish momentum.
The weekly timeframe suggests overextension in price action, hinting at a correction.
Daily Analysis
- Rising Wedge Pattern: A well-established bearish pattern; as price approaches the wedge's apex, momentum loss aligns with bearish expectations. A break below the wedge's lower trendline would confirm a bearish move.
- Bearish Divergence (RSI): Momentum slowing down despite rising prices strengthens the bearish case. This divergence often signals exhaustion in the prevailing trend.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.