Bitcoin prices have been surging over the past week or so, but the asset may have entered ‘overbought’ territory.
Bitcoin has made an impressive 22% over the past week. The move has propelled prices to a new 2023 top of $21,356 during the Asian trading session on Wednesday.
Furthermore, the crypto rally has pushed BTC above a number of key technical indicators. This could suggest that the bear market bottom has been formed, and a new uptrend is developing.
The 200-day simple moving average (SMA) is often used as a “litmus test for macro market trends,” according to Glassnode.
The analytics provider reported that this week’s rally had pushed BTC prices back above this key level, mirroring moves in previous cycles.
“Bitcoin markets often express a strangely consistent cyclical behavior, with this cycle trading below the 200D-SMA for 381-days, which is just 5-days shy the 2018-19 bear market at 386-days.”
Bitcoin RSI High
Another key technical indicator is the Realized Price (RP). Bitcoin blew through this level which is currently at $19,753, according to Woo Charts.
Realized Price is the value of all coins in circulation at their last moved price. Additionally, it can also be considered an estimate of what the entire market paid for their BTC.
However, asset prices still have a way to reach the longer-term 200-week moving average. This macro trend indicator is currently at $24,566.
While the short-term outlook is bullish, another indicator is flashing an overbought signal. The Bitcoin daily relative strength index (RSI) is currently just below 90, which is high. A retrace usually follows when RSI reaches these levels.
From a market sentiment outlook, Bitcoin is now back in neutral territory on the fear and greed index. It is the first time BTC has topped 50 on the sentiment index since April 2022.
BTC Price Outlook
At the time of writing, BTC was changing hands for $21,275 following three days of consolidation. There has been very little movement over the past 24 hours, but analysts seem optimistic about another leg up.
The next level of resistance is around $24,000, which was last visited in August 2022. However, a dip to the downside would find support at the $18,000 price zone.
Disclaimer
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