TL;DR
Bitcoin’s recent outflows from exchanges and other vital factors support the case for a push toward a new all-time high.
However, the rising RSI suggests the asset may be overbought and vulnerable to a short-term pullback.
The price of the leading cryptocurrency has been booming lately, briefly climbing above $104,000 earlier today (May 9). As of this writing, bitcoin (BTC) is worth approximately $103,000, which represents a 33% monthly increase.
The asset’s impressive rally sparked huge enthusiasm on crypto X, with multiple users predicting that an upswing toward a new all-time high is just a matter of time. Some important factors support the bullish thesis.
An example is BTC’s exchange netflow, which has been predominantly negative on most days in the past week or so. This indicates a shift from centralized trading platforms toward self-custody methods and reduced selling pressure.
The interest in BTC is also worth mentioning. Over the last few weeks, Google searches with the word ‘bitcoin’ have been on the rise, signaling increased attention from investors, especially retail.
As CryptoPotato reported earlier today (May 9), Bitcoin’s network saw almost 350,000 newly created wallets in a single day, signaling a FOMO effect. On some occasions in the past, the massive influx of retail investors has been a precursor of cycle tops. Although the current retail numbers are higher now than in the last several weeks, they are still far from what could be described as the bull run top.
Last but not least, we will focus on the upcoming meeting between US and Chinese officials scheduled for this weekend. The two sides will supposedly discuss de-escalation of the ongoing trade war. Recently, American President Donald Trump hinted that the tariffs imposed on China might be cut in the near future.
Eased tension between the two biggest economies in the world could positively impact the financial and crypto markets since it would reduce uncertainty and might boost investor confidence.
BTC’s recent bull run seems to have affected investors’ sentiment. Today, the popular Fear & Greed Index surged to “greed” territory of 73, a level last observed in January this year.
The metric tracks numerous segments, such as price volatility, social media comments, and surveys, to determine the momentary investor feelings toward BTC.
The predominantly bullish sentiment might sound encouraging, but one should keep in mind Warren Buffett’s advice, who once urged people “to be fearful when others are greedy and to be greedy only when others are fearful.”
The Relative Strength Index (RSI) is another indicator worth monitoring. The momentum oscillator measures the speed and magnitude of the latest price changes and varies from 0 to 100. It helps traders spot potential trend reversals, as readings above 70 typically signal that the asset could be overbought and headed for a pullback. Currently, the ratio stands at almost 75.
The post 3 Reasons Why a New Bitcoin (BTC) ATH Is Incoming appeared first on CryptoPotato.
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