Bitcoin has hit a new all-time high today, with prices reaching $5,226 on the CoinDesk Bitcoin Price Index.
At press time, the bitcoin-U.S. dollar (BTC/USD) exchange rate is trading at $5,200 levels. Week-on-week, BTC is up 18.75 percent, while month-on-month it's up 23 percent. The new record broke a previous all-time high of $5,013 set in September.
All in all, it's a sharp reversal of trend given the cryptocurrency dropped to a low of $2,980 in mid-September on the news China had banned token sales and that local cryptocurrency exchanges would shut in the aftermath. However, in subsequent days, bitcoin's price quickly regained, reportedly due to a pick-up in trading volumes in Japan, South Korea and other markets.
Increased institutional interest seems to have played a role in boosting bitcoin prices.
For example, a rumored "bitcoin desk" at Goldman Sachs would certainly be a game changer for the nascent market. Still, it's just the latest sign professional traders are increasingly interested in the market.
Further, even while skeptics continue to call the bitcoin rally a bubble, the price action analysis indicates no serious trouble ahead for the cryptocurrency.
The chart above shows that:
- Bitcoin is chipping away at $5,154 – resistance offered by 161.8 percent Fibonacci extension of the move from the April low – June high – July low.
- The RSI is overbought, although it's not a cause for concern, as the indicator is still well below the highs seen in August and June.
- On the above chart, resistance is seen at $5,378.56 – 161.8 percent Fibonacci extension of the move from the Sept. 15 low – Sept. 18 high – Sept. 23 low.
- The RSI is overbought.
- All major moving averages – 50-day moving average, 100-day moving average and 200-day moving average – are perfectly aligned one below the other, which indicates the long-run trend is bullish.
- A break above $5,154 would open doors for $5,378.56.
- A healthy technical pullback cannot be ruled out, given the overbought conditions. On the downside, the key support levels to watch out for are $5,000, $4,809, $4,500.
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