Running on fumes after 70% rally
Bitcoin has enjoyed a good run this past month but recent rallies are struggling to generate much momentum, which suggests a corrective move may be on the cards.
There was a lot of excitement as bitcoin broke back above $50,000 for the first time since May but it wasn’t long until profit-taking once again kicked in.
There is resistance around $51,000 – the 61.8% retracement of the April highs to June lows – which may be contributing to the profit-taking we appear to be seeing.
The momentum indicators on the daily chart are also both showing divergences – lower highs as price action makes new highs – which is another sign that the trend is weakening.
A correction would be interesting at this point, with bitcoin having rallied more than 70% in a little over a month.
Not exactly extraordinary for bitcoin considering what we’ve become accustomed to but still very substantial. The longer-term still looks bullish but perhaps a correction would be healthy.
With bitcoin having tracked the 55/89 SMA band higher on the 4-hour chart, a move below here could signal a correction is underway.
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