The price of Bitcoin (BTC) has risen more than 8% in the past seven days, with a new all-time high on January 20, when it surpassed $108,000 for the first time. This notable rise has sparked speculation about whether BTC’s uptrend will continue to test new resistance levels or face a potential pullback.
Despite the bullish momentum, technical indicators such as the DMI and Relative Strength Index indicate that the strength of the trend may be weakening, with sellers starting to exert more influence.
BTC DMI shows that sellers may be in control
The Bitcoin DMI chart reveals that the ADX fell to 23.2 from 30.7 over the past two days, highlighting the weak trend. The ADX indicator measures the strength of a trend, with values above 25 indicating a strong trend, and values below 20 indicating no trend.
A current reading below 25 indicates that Bitcoin’s upward momentum is losing steam, which could indicate a slowdown in market activity or a temporary pause in the uptrend.
Meanwhile, the +DI fell sharply from 34.8 to 19.7 on the day, reflecting declining buying pressure, while the -DI rose from 17.8 to 26.6, indicating rising selling pressure.
This shift indicates that although BTC is still technically in an uptrend, a weakening of +DI and a strengthening of -DI indicate that the market is losing steam. If this trend continues, Bitcoin price may enter a consolidation phase or risk a reversal, especially if -DI crosses +DI, indicating bearish dominance.
Bitcoin’s RSI indicates cooling momentum
BTC’s RSI is currently at 50.9, down from 65.5 just a day ago, indicating a shift in momentum. The Relative Strength Index measures the speed and magnitude of price movements on a scale from 0 to 100, with values higher than 70 indicating overbought conditions and potential price corrections.
In contrast, values below 30 indicate oversold levels and a potential bounce. A reading around 50 indicates neutral momentum, indicating that neither buyers nor sellers have clear control.
With BTC’s RSI now at 50.9, it reflects a balance between buying and selling pressure, but the recent decline from 65.5 shows weakening bullish momentum.
This may indicate that Bitcoin’s recent upward movement is losing steam, with the price potentially entering a consolidation phase. If the RSI continues to fall near 40, this could indicate increasing downside momentum, while a bounce above 60 could ignite bullish sentiment once again.
BTC Price Prediction: Can Bitcoin Reach $110,000?
The BTC EMA lines indicate that it is currently in an uptrend, with the short-term lines placed above the long-term lines. However, the narrow distance between these lines indicates that the upward momentum may be weakening, indicating a potential slowdown in the strength of the trend.
If the uptrend regains strength, BTC price could test the resistance at $105,700, and a breakout could push the price to $108,500. More bullish momentum could push BTC to $110,000 for the first time.
On the downside, if momentum subsides, BTC price could test support at $98,800, with possible falls to $97,800 and $91,200 if this level is lost. A further breakdown could take BTC price below $90,000 to test key support at $89,400.
Disclaimer
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