Indicator Suggests Bitcoin's $8K Rally Is Overstretched

Bitcoin market has had a bullish start to the week, but the momentum could wane in the next few days, technical studies indicate.

The leading cryptocurrency rose to a fresh two-month high of $8,130 on Bitfinex today, having witnessed an inverse head-and-shoulders breakout last week.

Further gains could be on the cards, albeit after a brief pause or a price pullback as a key technical indicator is flashing overbought conditions.

As a result, the cryptocurrency may find it hard to gain a foothold above the immediate resistance of $8,140 in the next few days and could see a minor price pullback.

The cryptocurrency has found acceptance above the 50-day MA and 100-day MA. Meanwhile, the short duration charts are also calling a further price rally.

Accordingly, the attention has now shifted to the significant price obstacle of 200-day MA, currently located at $8,676.

View BTC's break above $8,000 has bolstered the already bullish technical setup overbought conditions could cap the upside around $8,150 in the next few days.

A pullback to ascending 10-day MA, currently $7,570 and seen sloping upwards to $7,700 in the next 48 hours, cannot be ruled out and will likely end up refueling the BTC freight train for a sustained move towards the 200-day MA of $8,676.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

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