- Bitcoin is pushing against a key resistance level that could signal a pause in its recent rally, said Katie Stockton of Fairlead Strategies.
- After staging a one-month rally of 69%, bitcoin pushed up against the $51,000 resistance level.
- If bitcoin breaks above that level, it could test its record high of about $65,000, Stockton said.
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The rally in bitcoin since its mid-July bottom is running into a key resistance level that could signal a short-term pause, according to Fairlead Strategies founder Katie Stockton.
Bitcoin is up 69% since it fell below $30,000 on July 20. The popular cryptocurrency soared to $50,562 on Monday, just below the $51,000 resistance level being monitored by Stockton. Since then, bitcoin has pulled back to about $49,000.
The $51,000 level represents "a natural place for a short-term pause in the rally," Stockton said, adding that the resistance level is derived from a fibonacci retracement level.
But despite a potential pause in bitcoin's rally, the outlook remains bullish based on short-term, medium-term, and long-term momentum indicators, according to Stockton.
"Our intermediate-term outlook is bullish, as positive momentum should help bitcoin absorb overbought conditions well," Stockton explained. And because short-term momentum is to the upside, Stockton doesn't expect a near-term pullback to support near the 50-day moving average, which currently sits at about $39,500.
Instead, Stockton thinks the next move in bitcoin is favored to the upside. If bitcoin decisively clears $51,000, marked by daily consecutive closes above that level, then bitcoin's next stop should be its record-high of about $65,000. A move to $65,000 represents potential upside of 31% from current levels.
"Long-term momentum behind bitcoin has strengthened and the 200-day moving average is rising again, supporting a bullish long-term outlook," Stockton concluded.
