Bitcoin has reached a new all-time high of $5,161 today.
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 in mid September after China banned token sales and local cryptocurrency exchanges. However, in the subsequent days, BTC quickly regained poised, reportedly due to a pick-up in trading volumes in Japan, South Korea and other markets. The rotation of money out of the ether and ethereum-based coins and into bitcoin also helped the cryptocurrency scale new heights.
Increased institutional interest seems to have played a role in boosting bitcoin prices. For example, a ‘bitcoin desk’ at Goldman Sachs would certainly be a game changer. News had hit the wires earlier this month that Goldman Sachs is considering a brand new operation which would be dedicated to bitcoin trading.
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.
Space shuttle image via Shutterstock