Bitcoin's price hike may be pushing it to overbought territory, says trader

25 Jun, 2019 | Updated: 25 Jun, 2019
by Richard Allen
Price Analysis
Bitcoin's price hike may be pushing it to overbought territory, says trader

The last three months have been great Bitcoin, seeing gains of almost 200% as well as crossing the $200 billion market cap for the first time since January 2018, setting a new yearly high of $11,400 at the same time. Popular trader Alex Kruger has now touched on the possibility that Bitcoin may be in overbought territory.

The Keltner Channel is a volatility-based indicator set above and below an exponential moving average. It’s used to identify reversals with channel breakouts and channel direction. In terms of Bitcoin, the fact that it’s only traded a few times outside of the channel suggests that it’s in overbought territory.

Kruger goes on to note that since 2014, Bitcoin has been trading outside the Keltner Channel with an RSI greater than 90 nine times. Of those nine occasions, six have retraced to the open of the preceding day in under 20 days, with an average of 10 days.

One of the nine times saw it take 79 days while twice in May of 2017 it never retraced at all. He continued:

As is generally the case with overbought, expectations are centered around a potential correction in the not too distant future. At the time of writing, Bitcoin is trading at $11,238.57, an increase of 3.37% in the last 24 hours. 

BTC/USD chart provided by Tradingview 

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