Bitcoin prices have risen in recent weeks, but the asset may have reached an ‘overbought’ zone.
Over the last week, Bitcoin has gained an amazing 22%. During the Asian trading session on Wednesday, prices reached a new 2023 high of $21,356.
Furthermore, the crypto boom has sent BTC above a number of critical technical indications. This could indicate that the bear market has bottomed and a fresh uptrend is forming.
The 200-day simple moving average (SMA) is frequently employed as a “litmus test for macromarket patterns,” according to Glassnode.
According to the analytics service, this week’s rally has brought BTC prices back above this critical threshold, repeating previous cycles.
“Bitcoin markets often express a strangely consistent cyclical behavior, with this cycle trading below the 200D-SMA for 381-days, which is just 5-days shy of the 2018-19 bear market at 386-days.”
The Realized Price is another important technical indicator (RP). Bitcoin flew through this milestone which is currently at $19,753, according to Woo Charts.
The value of all coins in circulation at their most recently moved price is known as the realized price. Furthermore, it can be seen as an approximation of what the entire market paid for their BTC.
However, asset prices have a long way to go before reaching the longer-term 200-week moving average. The current value of this macro trend indicator is $24,566.
While the short-term prognosis is positive, another indicator is indicating overbought conditions. The daily relative strength index (RSI) for Bitcoin is currently just below 90, which is considered high. When the RSI reaches these levels, there is usually a retracement.
In terms of market mood, Bitcoin has returned to a neutral area on the fear and greed index. BTC has surpassed 50 on the emotion index for the first time since April 2022.
Following three days of consolidation, BTC was changing hands for $21,275 at the time of writing. Although there has been minimal movement in the last 24 hours, analysts are confident about another leg up.
The next level of resistance, which was last reached in August 2022, is roughly $24,000. A drop to the downside, on the other hand, would find support near the $18,000 price level.