The rally in bitcoin since its mid-July bottom is running into a key resistance level that could signal a short-term pause, according to Fairlead Strategies founder Katie Stockton. Bitcoin is up 69% since it fell below $30,000 on July 20. The popular cryptocurrency soared to $50,562 on Monday, just below the $51,000 resistance level being monitored by Stockton. Since then, bitcoin has pulled back to about $49,000.
The $51,000 level represents "a natural place for a short-term pause in the rally," Stockton said, adding that the resistance level is derived from a Fibonacci retracement level. But despite a potential pause in bitcoin's rally, the outlook remains bullish based on short-term, medium-term, and long-term momentum indicators, according to Stockton. "Our intermediate-term outlook is bullish, as positive momentum should help bitcoin absorb overbought conditions well," Stockton explained. And because short-term momentum is to the upside, Stockton doesn't expect a near-term pullback to support near the 50-day moving average, which currently sits at about $39,500.
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