Bitcoin (BTC) recovery gathers steam, but pull back inbound

Bitcoin (BTC) has reached the major resistance at $63,000, putting on $2,300 early on Monday. If the king of the cryptocurrencies can break through this resistance, the range high at $71,300 is the potential target. However, a short term pull back could be about to take place.

Buyers have entered the cryptocurrency market again and Bitcoin has risen a grand total of $5,000 over the last three days. This makes a welcome change from previously, when Bitcoin lost $18,500 over five weeks of intense selling from the German government et al.

On Monday, the $BTC price has reached the critical resistance at $63,000, and is currently trading right at this level. Already having put on 3.6% for the day so far, Bitcoin will likely have some problems here. However, if the momentum can continue, a breakthrough could take place.

Short term momentum is dying

Source: TradingView

For the short term price action, it can be seen that $BTC has broken through the downward-sloping trendline, and is pressing up against the resistance. However, the stochastic RSI is indicating that $BTC could be oversold, given that the indicator lines are at the top. Momentum could potentially start dying here, and what is even more telling is that this is the same on the 8-hour and 12-hour time frames, and is even reaching the top on the daily time frame as well.

Rejection from $63,000, and retest of $61,000?

Source: TradingView

All is much clearer on the weekly time frame. It can be seen that the $BTC price has just started to be rejected from the $63,000 resistance level. It might be expected that the $61,000 could be tested again. This would give the shorter time frame stochastic RSIs a chance to reset. 

Weekly stochastic RSI is main catalyst

The main catalyst is at the bottom of the chart. The weekly stochastic RSI can indicate incredibly powerful momentum. The blue fast line is just showing above the 20 level, if the orange slow line can also cross above 20, the resulting momentum could be enough to potentially send Bitcoin to new highs.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.