Bitcoin, in an abrupt burst of momentum, crossed the $9,200 mark today. As soon as BTCUSD surpassed the resistance at $8,900, a lot of volumes began to be traded. Buyers overpowered the sellers, and BTC surged.
The Dow Jones Industrial Average Index rose for the second day in a row. Upon opening, the Dow was up by around 400 points today. Yesterday, it had gained about 555 points. It shows that investors are showing trust in financial markets again.
BTC traded volumes witnessed a significant jump
The Bitcoin market was unusually low on liquidity in the past two weeks. $8,900 was a strong barrier that broke today. As soon as that happened, a lot of buying action ensued.
Bitcoin is now well above the 50-day moving average and the 20-day Exponential Moving Average. These indicate that BTC is not bearish anymore in the short term. However, things are still the same when it comes to the long run.
Technical indicators suggest this bull run will be short-lived
Several retail traders would have undoubtedly jumped in today to buy Bitcoins. However, a closer look at the hourly-chart for BTCUSD would reveal a different story than the perceived bull-run.
The Relative Strength Index or RSI crossed the 80-level of 20,80 RSI scale. RSI scale over 70 is usually considered an overbought territory. In this case, the indicator passed well over the overbought region. It is only a matter of time before RSI falls as people start selling their Bitcoins.
Moreover, the 200-day moving average stands as a crucial resistance. Following the rise, BTC has only formed Doji candlesticks. It indicates an indecisiveness in the market.
Investors should be careful before making any rash investments as BTCUSD is still in a weak market.