Considering a strong rally and overbought conditions, a bearish correction could be expected soon
Bitcoin continues its upward spiral, extending gains to the highest levels since June 2019 on Tuesday. BTCUSD surged past the $13,300 region and climbed to $13,500 in recent trading. Now, bitcoin has more than tripled since the sell-off seen in mid-March that sent the prices below the $4,000 handle amid a widespread panic due to the coronavirus pandemic.
The leading cryptocurrency by market capitalization gas accelerated the ascent after a break above the $11,700 area earlier this month and retains a strong bullish bias despite the overbought conditions. If the rally continues, the digital currency could target the $14,000 handle. However, the prices will first need to overcome the $13,850 intermediate resistance represented by 2019 highs. If this level turns into support, it would mark the highest levels since early-2018.
At the same time, considering a strong rally and overbought conditions both in the short- and longer-term timeframes, a bearish correction could be expected soon. It looks like investors could make a pause and push the prices lower before another bullish wave takes bitcoin to fresh long-term tops. If so, the immediate support arrives at $13,250, followed by the $13,000 figure. In case of a bearish correction, BTCUSD needs to hold above the $12,700 threshold. Otherwise, a deeper retreat could be expected.
In a wider picture, bitcoin remains within a robust upside trend and could enter a new phase of a bullish market after a possible short-term correction as bitcoin acceptance by institutional investors continues to grow globally.
On the positive side, JPMorgan revealed its new analysis that showed the banking giant expects bitcoin price to double or even triple if the current trend continues. Furthermore, the bank expects BTC to take significant market shares from gold and become a store of value in the future. In part, the latest jump in the first cryptocurrency could be attributed to this bullish analysis.