Key Points:
Bitcoin may peak at $119,500 as price indicators show "overbought."
Traders are watching for a retest of support levels to solidify the recent rebound of nearly 10% over the past week.
ETF inflows totaled $1.6 billion in three days, with IBIT entering the top 20 ETFs by asset size.
Bitcoin (BTC) is preparing for a short-term pullback and support test as price indicators show "overbought."
Traders warned on Thursday that after reaching a six-week high and breaking through $119,000, Bitcoin may experience a downward retracement.
Over the past week, Bitcoin has risen nearly 10%, showing momentum from bulls, which also corresponds with the upward trend in gold.
According to data from Cointelegraph Markets Pro and TradingView, despite Bitcoin briefly breaking through $119,500, market participants still expect this rebound to cool off before continuing, mainly because price indicators have become overheated.
Renowned trader Roman wrote in a related post on X: "Further observation suggests that a pullback/support retest is reasonable, as shown by lower time frames (LTFs)."
One piece of evidence supporting this trend is the Relative Strength Index (RSI), which currently remains in the "overbought" zone, close to 90/100. This is the highest reading on the four-hour chart since July when BTC/USD first broke above $123,000.
The RSI is a classic leading indicator, and overbought values on lower time frames may signal a market reversal.
On daily and weekly charts, the situation is different, as the RSI remains "overbought" in the final stages of previous bull markets.
Roman summarized: "Volume, RSI, and MACD indicate that conditions are good for continued upward movement to $124,000 in the coming days."
Continuing on the RSI, financial research resource Cubic Analytics founder Caleb Franzen discovered a bullish divergence between Bitcoin and the S&P 500 on Wednesday.
This finding comes from an analysis of the largest spot Bitcoin exchange-traded fund (ETF) in the U.S. — BlackRock's iShares Bitcoin Trust (IBIT).
Bullish RSI divergence for Bitcoin relative to the S&P 500 (IBIT/SPY). pic.twitter.com/hGH2XZoPWc
Data from UK investment firm Farside Investors shows that net inflows into U.S. ETFs exceeded $1.6 billion this week, with IBIT contributing $600 million.
Meanwhile, Bloomberg Intelligence's dedicated ETF analyst Eric Balchunas confirmed that IBIT has entered the top 20 ETFs by asset size.
He revealed on X: "Someone asked me how long it will take to enter the top ten. There’s a $50 billion gap. If the past 12 months' performance repeats, it may not be long. It attracted $40 billion in the past 12 months, with an increase of 85%."
This article does not constitute investment advice or recommendations. All investments and trading operations carry risks, and readers should conduct their own research before making decisions.
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Original article: “Bitcoin (BTC) Breaks $119.5K, But RSI Warns of Possible Pullback”
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