In our last analysis we noted that most probably Bitcoin's upward movement was not finished. Staying inside the bullish channel is key for the up trend. Our expectation was to see price take some time to challenge the lower channel boundaries and then move to new short-term highs towards $59,000. Bitcoin price has already reached this target but the RSI has provided us with another warning.
Orange lines - bearish RSI divergence
Despite making a higher high, the RSI has not followed. The RSI has provided us with a second lower high providing another bearish divergence. This is not a reversal signal but only a warning. A warning that bulls should not be overoptimistic. They should be cautious as a reversal is justified. The RSI making lower highs implies that the bullish trend is weakening. This could go on for some time without a reversal, nevertheless traders need to be cautious and protect their gains. At current levels I would not be a Bitcoin buyer. A pull back is justified and would provide better opportunities.
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