Baxia Markets
August 03, 2021

Bitcoin falls after entering an overbought status.

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BTCUSD is on a four-day losing streak after breaking the $40,000 barrier. The cryptocurrency had closed with a win for ten straight sessions before the drop. It managed to break the resistance level at $37,150, which is at our 23.6% Fibonacci retracement, but it could not consolidate a breakout on the $42,460 level.

The Bollinger bands are wide, and volatility can be expected. The price was trading above the upper band, which suggested that the price was relatively high before it started to fall. The price is now looking to find support at $37,150, allowing it to gain strength to attempt another breakout of the 38.2% retracement.


BTCUSD August 2nd 2021

The relative strength index is naturally falling with the price, recovering from an overbought status; the RSI reached 75.3%. The markets reacted to this, and the asset started losing ground; this could be a good thing for Bitcoin as it will allow it to complete a breakout with more strength.

The moving averages indicate a trend reversal; this is an important indicator as it tells us the expected general trend of an asset; in this case, the general trend has changed and is upwards according to these indicators, supported by our parabolic SAR.

We might see the cryptocurrency pullback to the support level in the short term; however, we believe that the price will rise in the medium term.


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