Bitcoin’s Impressive Rally Might Take a Breather

In the past week, Bitcoin (BTC), which increased its value by over 20%, once again made headlines all over the world. According to the unfailing Bitcoin index, the exuberant rally in the BTC market could now be entering the usual consolidation period. 

There Might be a Pause in the Bitcoin Rally 

The signal from the Bitcoin Greed and Fear Index (GFI), which soared from less than 10% to 93% in about a week according to crypto services provider Matrixport, shows that the market might take a breather from its strong rally. 

The index tries to track the dominant sentiments in the market; values above 90% signify greed or excessive optimism, while values below 10% mean extreme fear or pessimism. 

Markus Thielen, research and strategy director at Matrixport, while evaluating the current situation in the index, said, “Our Bitcoin Greed and Fear Index reached exuberant levels in record time.” He advised short-term investors to take some profit and prepare for potential pullbacks. 

Looking back, the index’s rise above 90% has signified temporary price peaks, while dips below 10% have foreboded price rallies. 

The 21-Day Simple Moving Average of the Index Says “The Rally Will Continue” 

On the other hand, the 21-day simple moving average (21d MA) of the index is well below the 90% level. This indicates that the path of least resistance for the largest cryptocurrency is upward. Thielen expressed his expectation by saying, “The fact that the 21-day moving average (black line) is still rising could indicate that Bitcoin’s price will move higher after overcoming the current exuberant momentum phase with some accumulation.” 

Many crypto analysts and experts predict that Bitcoin will rise above $35,000 in the short term. Prominent market analyst Josh Olszewicz, in his assessment to CoinDesk, said, “The price successfully bounced from this pullback region and completed the falling wedge formation. Both the target area of the previous inverse head and shoulders formation and the target area of the new falling wedge formation have been reached. Also, we have our general pivot resistance around $38,000.” Olszewicz added, “Therefore, I expect the price to move towards the heavy resistance area of $30,000 and the price to pull back before rising further.” 

Olszewicz also anticipates Bitcoin moving towards its highest level reached in mid-April, $31,000, and then retreating to the former resistance-support level of $25,200 earlier this month.