Opinion: overbought and the decline has prevented bitcoin to reach $6000

Strong overbought and a number of other technical factors have served as barriers to bitcoin prices on its way to around $6000, I’m sure CoinDesk analyst Omkar Godbole.

According to analysts, the price of the first cryptocurrencies need to stay above $4912. Otherwise, BTC might fall back to $4625, through which now passes the 200-day moving average.

Bullish sentiment will increase if the price will break the $5347 corresponding to the maximum weekly candle Doji indicating uncertainty. This would open the door to the psychological mark of $6000, however, a significant obstacle to it would be the overbought relative strength index (RSI).

Confident the upward movement was suspended due to several factors, among which the short-term overbought market and a decline in trading volume amid rising prices.

Overbought

The daily chart of BTC/USD exchanges are Bitstamp from TradingView

The relative strength index on 2 April were in the overbought area, above the 70.00 mark. It happened against the background of the sharp rise in prices above $5000. As you move up to $5345 RSI for the first time since Dec 2017 reached a value of 90.

Usually after the strong sell-price or rolled back down, or goes in «sideways». Currently, the RSI remains in the area above $ 70.00, but gradually the indicator values are decreasing, indicating an increasing probability of price adjustment.

Declining trading volumes

The daily chart of BTC/USD exchanges are Bitstamp from TradingView

Drawing attention to the Volume indicator, you can see that soon after the jump to around $5000, and subsequent move to $5347, trading volume was declining. Thus, formed a bearish divergence, indicating a high probability of a pullback towards $4912 which corresponds to the local minimum from April 11.

Note that in the last two weeks of daily trading volume declined from $24 billion to $10 billion apparently, the recent strong recovery in prices was only short-term.

The four-hour chart

The four-hour chart of BTC/USD exchanges are Bitstamp from TradingView

On a smaller timeframe the bearish pattern formed «Head and shoulders». If the price will fall below the line of the «neck» that passes through $4988, the next likely target will be the level of $4629.

Currently, the first cryptocurrency is trading at $5140. In the last days, weighted average rate of BTC increased by 1.3%.

We will remind, recently the head of BKCM LLC Brian Kelly expressed his opinion that within two years, the price of bitcoin will update the historical maximum.


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