• Bitcoin successfully broke out above the critical $30K resistance level.
• However, caution is advised as RSI indicator is signaling overbought conditions.
• If it retreats below $30K, the recent breakout could be considered false.
Bitcoin Breaks Out Above $30K
Bitcoin’s price has recently broken out above a crucial resistance level at $30K. After this successful breakout, the upward momentum in Bitcoin’s price has halted on the daily chart and is currently consolidating above this level.
Warning Signs Emerge
Caution is advised as the RSI indicator is signaling overbought conditions, indicating a potential short-term decline. If it retreats below $30K, the recent breakout could be considered false, leading to a possible reversal. In such a scenario, the 50-day moving average around $28K and the 200-day moving average near $25K would likely act as support levels.
Consolidation Phase
Examining the 4-hour timeframe, it is clear that Bitcoin’s price is currently in a consolidation phase above previously breached $30K resistance level. This consolidation follows a rapid and steep ascent after breaking out from a significant descending channel.
RSI Indicator
Although RSI indicator is hovering near midpoint of 50% in this timeframe, there is still notable chance of short-term retracement if $30K level fails to sustain its current position for long period of time.
Conclusion
Overall, Bitcoin has been able to break out from an important resistance level at $30k but warning signs are emerging which may lead to retracement or change in direction if not taken seriously in time.