The price of Bitcoin has skyrocketed about 50% so far this month to a high of $8390, following a 28% rally the month before. The crypto currency has surged past its 200-day moving average, all the way down at around $4440. In other words, BTC/USD would have to half from here to get back to this long-term moving average. The distance between it and this moving average makes it susceptible for a drop, as prices do tend to revert to the mean from time to time. In fact, Bitcoin is looking extremely ‘overbought’ in the short-term. So, for the sake of healthy price action, Bitcoin will either need to correct itself or, ideally for the bulls, consolidate for a while before it makes further gains. Indeed, the Relative Strength Index (RSI) is already at extremely overbought levels around 80. In fact, Bitcoin was in the process of potentially forming a bearish outside bar candle on its daily chart, so this phase of the uptrend could come to an end. But zooming out, it is worth pointing out that Bitcoin has not even retraced to its shallow Fibonacci level of 38.2% at $9440 against its record high. So, this year’s rally is certainly impressive but it does not necessarily mean the long-term bear trend has ended.

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DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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