Bitcoin surpassed the $ 50,000 mark this morning – the first time in more than 3 months. The intraday high was set above $ 50,400.
The last time at comparable levels, the first cryptocurrency was in mid-May, when it was on its way to lows below $ 30,000. The recovery over the past time was more than 70%. At its current value, the capitalization of BTC is almost $ 950 billion.
Based on the daily chart, the MACD Moving Average Convergence Divergence indicator gives a bullish outlook. This happened after the sell signal presented in the middle of last week was canceled. Currently, the 12-day exponential moving average (EMA) is holding above the 26-day EMA, strengthening the bullish influence in the market.
Interestingly, according to the Relative Strength Index (RSI), Bitcoin is not overbought yet. This technical index tracks the trend of an asset and measures its strength. The RSI also shows when an asset is either oversold or overbought. When the RSI touches the shoulders at 70, it means that the bulls still have room to aim for.
Upper support, preferably above $ 50,000, will be critical to the sustainability of the uptrend. Investors are currently expecting to reach $ 60,000, but analysts fear that this will lead to the formation of a double top pattern. This technical pattern is very bearish and could result in the loss of a significant portion of accumulated profits.
It is important to understand that we are currently dealing with extreme greed on the part of investors. The Fear / Greed Index hovers around 79, indicating FOMO (fear of missing out).
When investors get too greedy, the market often approaches a correction. Hence, it requires caution when trading in such an environment.
Failure to hold support above $ 50,000 could lead to a surge in overhead pressure. The next tentative support at $ 48,000 flattens the downtrend, giving the bulls another chance to conquer $ 50,000.