Blue lines- Fibonacci retracement levels
Red line- support trend line
Orange rectangles- potential repetition of past action
Green rectangles- overbought RSI levels combined with price top
Bitcoin is trading around $34,775. Short-term trend remains bullish as price continues making higher highs and higher lows. The RSI has reached overbought levels and is forming bearish divergence signs. As we explained in a previous analysis, if Bitcoin repeats its past price action, then upside potential is limited and a pull back will follow. Pull back target is at previous highs around $32,000-$31,800. Price justifies a pull back towards $32,000 for two main reasons. Price has already tested the 38% Fibonacci retracement resistance and the RSI suggests that a pull back is imminent. All these makes us feel cautious as there is no reversal signal in the market yet.
