Cryptocurrency market came close to a crucial resistance, the bulls will have to give our best.
The Bloomberg Galaxy Crypto, assessing the dynamics of several of the most common cryptocurrency, including bitcoin and ether, close to the mark of 500. This year he has twice tried to overcome this mark and both times unsuccessfully.
In addition, the relative strength index (RSI) is also in the overbought zone at around 80. About the same technical pattern was formed during the February rally that ended with the catastrophic collapse.
The cryptocurrency ran into a technical barrier
Bitcoin is the largest cryptocurrency this week, grew by nearly 17% on the background of rumors that the American government will strengthen monetary and fiscal stimulus, which will further weaken the dollar and increase inflation risks.
«We need a powerful catalyst to continue growth from current levels, because to record highs is still far away,» said ed Moya, chief market analyst at Oanda Corporation. «As soon as the price breaks above these levels, interest in cryptocurrency will rise again, reinforcing the bullish momentum in the market. The devaluation of the dollar also will benefit».
The analyst also noted that the 14-day relative strength index suggests that the rally brought gold prices and bitcoin to the overbought zone. However, the cryptocurrency industry has the potential to withstand the test of time.
«The fundamental backdrop is improving in the background of the inflow of institutional investors into the industry, and this momentum will lead to positive long-term consequences,» he said.
At the time of writing, BTC/USD was trading at $11 000. Yesterday’s attempt to break again was not successful. Coin tested the high at $11 355, but failed to gain a foothold in the new levels. Technical analysts say that in the long term, bitcoin shows no sign of weakening bullish trend. The bulls took a pause before the next leap upwards.