Bitcoin’s daily RSI shows overbought conditions as the asset approaches a critical resistance zone near its previous all-time high.
A Bearish Order Block and Fair Value Gap align at resistance, creating a high-probability reversal area that traders are monitoring closely.
Risk-to-reward remains favorable, with a stop loss positioned 4% below the ATH, attracting attention from short-term technical traders.
Bitcoin is trading in an overbought position, as indicated by the daily RSI, and this is prompting short-term market caution among players.
RSI Signals Short-Term Caution for Bitcoin
Crypto analyst Ali_charts recently indicated that Bitcoin's daily Relative Strength Index (RSI) is in overbought levels. This price momentum-measuring metric is currently warning of caution as Bitcoin approaches crucial levels of resistance.
https://twitter.com/ali_charts/status/1924512122731426122
When the RSI is above 70, it generally means an asset is overbought. This level of reading tells us that short-term price strength is likely to be unsustainable. Traders are paying close attention, as historically, overbought levels of RSI have resulted in short-term corrections or consolidations.
With Bitcoin nearing its all-time high, this overbought reading becomes more relevant. Momentum may slow if buying pressure weakens at resistance. The market’s next move could depend on whether this condition results in a pause or reversal.
Bearish Technical Zone Aligns with ATH
Another analyst Crypto Patel pointed out that Bitcoin is now at a critical level on the daily chart. A Bearish Order Block (OB) and a Fair Value Gap (FVG) are aligned just below the all-time high. This combination creates a high-probability reversal zone, especially when paired with the overbought RSI reading.
If Bitcoin is rejected at this zone, the price could drop below $100,000. Traders are watching for signs of weakness as the price tests this area. The alignment of the OB and FVG adds technical strength to this resistance.
However, a breakout above the all-time high could trigger strong momentum. Patel stated that such a move might push Bitcoin toward the $120,000–$130,000 range. The reaction at this level will likely define the short-term direction.
Tight Risk Margin as Volatility Builds
Patel mentioned that the current setup offers a low-risk trade, with a stop loss of only about 4% from the ATH. This tight margin attracts traders seeking high reward potential with limited downside exposure.
Bitcoin’s current overbought condition, combined with strong resistance levels, has created a decisive moment. The coming days may determine whether the asset continues its rally or enters a corrective phase.
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