Bitcoin is has reached a new all-time high today, with prices hitting a record $5,161.
At press time, the bitcoin-U.S. dollar (BTC/USD) exchange rate is trading at $5,130 levels. Week-on-week, BTC is up 18.75 percent, while month-on-month it’s up 23 percent.
Prices had dropped to a low of $2,980 after China banned token sales and local cryptocurrency exchanges ceased services as a result. The stellar ‘V’ shaped recovery from $2,980 could be attributed to pick-up in trading volumes in Japan, South Korea and other markets due to rotation of money out of the ether and ethereum-based coins and into bitcoin.
Increased institutional interest also appears to have played a role in boosting bitcoin prices. For example, earlier this month, news hit the wires that Goldman Sachs is considering a brand new operation which would be dedicated to bitcoin trading. A ‘bitcoin desk’ at Goldman Sachs would certainly be a game changer.
Still, while skeptics continue to call bitcoin rally a bubble, the price action analysis indicates no serious trouble ahead for the cryptocurrency.
The chart above shows that:
- Bitcoin is chipping away at $5,154 – resistance offered by 161.8 percent Fibonacci extension of the move from the April low – June high – July low.
- The RSI is overbought, although it’s not a cause for concern, as the indicator is still well below the highs seen in August and June.
- On the above chart, resistance is seen at $5,378.56 – 161.8 percent Fibonacci extension of the move from the Sep 15 low – Sep 18 high – Sep 23 low.
- The RSI is overbought.
- All major moving averages – 50-day moving average, 100-day moving average and 200-day moving average – are perfectly aligned one below the other, which indicates the long-run trend is bullish.
- A break above $$5,154 would open doors for $5378.56.
- A healthy technical pull back cannot be ruled out, given the overbought conditions. On the downside, the key support levels to watch out for are $5000, $4809, $4500.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.