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One technical indicator signals bitcoin can lose steam after 10% PayPal rally

 


Bitcoin's massive leap from Wednesday may have gone too far, too fast.
The world's most popular cryptocurrency rose above $ 13,000 on Wednesday and continued to rally for a week after PayPal announced that its users will soon be able to buy, sell and store bitcoins.
However, the 14-day Relative Strength Index exceeded 80 on Thursday trading.
RSI is a popular indicator of price momentum, and readings above 70 usually signal an overbought asset.
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Bitcoin's rally in a week could have been too fast for investors.
The world's largest cryptocurrency topped $ 13,000 on Wednesday for the first time since July 2019 and is hovering around that level as new supporters rush to the digital token. The surge began when PayPal announced Wednesday morning that its users will soon be able to buy, store and sell cryptocurrencies on their platform. Billionaire investor Mike Novogratz called PayPal's move "the biggest cryptocurrency news of the year."
However, the coin's 14-day Relative Strength Index suggests that the rally has outpaced itself. A popular technical measure is used to measure the momentum of an asset and determine whether it is overbought or oversold.
Bitcoin's RSI jumped above 80 in Thursday trading and remained at that level in early Friday trading. Readings above 70 suggest that the asset is overbought and could be triggered by a reversal.


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