Bitcoin’s price is currently showing strong signs of surpassing its previous all-time high, reaching toward the $70K level. As the cryptocurrency market enters uncharted territories, predicting its future upside potential becomes increasingly complex. Technical and on-chain analysis can provide some insights into the possible trajectory of Bitcoin’s price in the coming months.
Potential Targets and Warnings
On the daily timeframe, Bitcoin’s price is breaking the previous all-time high and aiming for $70K. Psychological resistance levels at $70K and $80K could be potential targets in the near future. However, the Relative Strength Index is signaling an overbought condition, suggesting a potential correction or consolidation in the short term.
Looking at the 4-hour timeframe, the recent consolidation is more evident as the price hovers above the $69K resistance level. A longer-term rally might be on the horizon, but the overbought region on the Relative Strength Index in this timeframe indicates potential challenges ahead. A pullback could find support at the $64K level, offering a turning point for Bitcoin’s price to rise further.
Market Sentiment and Risks
Despite Bitcoin’s aggressive rally and the establishment of a new all-time high, market sentiment is excessively optimistic. The funding rates metric, which gauges the aggressiveness of buyers and sellers in executing orders, is showing highly positive values. These values surpass those seen during the previous all-time high, indicating a potential risk of long liquidation cascade in the short term.
The euphoric market sentiment may prove costly for Bitcoin, as a sharp pullback or reversal could be triggered by the high funding rates. Traders should exercise caution and consider the possibility of market corrections amidst the current bullish trend. Monitoring key support and resistance levels, as well as keeping an eye on technical indicators like the Relative Strength Index, can help navigate the potential upsides and pitfalls of Bitcoin’s price in the evolving cryptocurrency landscape.
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