Bitcoin’s price outlook against the US dollar suggests that the cryptocurrency may have risen too quickly, indicating that a small downward correction could happen before another upward surge.
Bitcoin is currently holding strong near its highest level in a month. Last week, it increased by 12.5%, marking its biggest weekly gain since mid-October 2021. However, its trading range has been narrower over the past three days, hinting that the buying momentum might be slowing down as it approaches a key resistance level at $49,054, which was its peak on January 11th and the highest since late December 2021.
The daily chart shows that Bitcoin is in an overbought condition, and the bullish momentum is diminishing. This signals a potential pause in the upward movement and could prompt some investors to take partial profits.
Despite this, the overall outlook remains positive because the recent correction from $49,054 to $38,501 has been almost entirely reversed. This indicates that any price drops are likely to be limited, providing opportunities for investors to re-enter the market and potentially break through the $49,054 barrier, moving towards the psychological milestone of $50,000.
Additionally, the Fibonacci 76.4% retracement level, which is at $46,564, has now become a strong support level. This means that any downward corrections are expected to be contained around this level, maintaining the overall bullish market structure.
Key resistance levels to watch are at $48,828, $49,054, $49,500, and $50,000, while support levels are at $47,515, $46,882, $46,564, and $45,300.