Bitcoin surged nearly 35% due to Trump’s election win and Fed rate cut, indicating overbought conditions with a possible 15% correction. Historical patterns suggest the cryptocurrency could see new highs by mid-December 2024 despite short-term volatility. The election cycle historically supports post-election price increases, fostering a bullish long-term sentiment.

Bitcoin (BTC) has experienced a significant surge, rallying approximately 35% within the last week, largely spurred by Donald Trump’s recent presidential election victory and a 25 basis point interest rate reduction by the Federal Reserve. As of November 12, Bitcoin was poised to register its first daily decline following Trump’s win, with prices retracting more than 5.30% from its intraday peak near $90,000. The current overbought conditions, indicated by Bitcoin’s daily relative strength index (RSI) exceeding 70, suggest a potential correction may be imminent as traders begin to capitalize on their profits. Historical trends reveal similar scenarios; for instance, in late October 2024, the RSI rose above 70, preceding an 8.5% price correction, and a 23.45% decline occurred after overbought signals in March 2024. Forecasts predict that Bitcoin could face a correction in November 2024, with a target price around $73,810, aligning with the asset’s ascending trendline support and corresponding to a 15% drop from current levels. It is important to note that while overbought RSI readings can indicate a potential downturn, they do not automatically lead to immediate price declines. Past instances demonstrate that Bitcoin can remain overbought during strong bullish trends, as seen with the 60% rise from February to March 2024. Should Bitcoin’s trajectory mirror previous patterns, it could reach or surpass $100,000 within the upcoming weeks, potentially by mid-December 2024. This anticipated short-term correction should not be construed as the onset of a bear market; instead, it may facilitate the exit of profit-takers, setting the stage for long-term bullish momentum as Trump’s presidency is seen as favorable for cryptocurrency markets. Historically, Bitcoin has achieved new heights shortly after U.S. elections, suggesting a likelihood of a similar outcome in the current cycle.

The cryptocurrency market has been abuzz following Donald Trump’s successful election bid, which has instilled renewed optimism among investors. Bitcoin, as the leading cryptocurrency by market capitalization, often experiences heightened volatility around significant political events. The Federal Reserve’s monetary policy, particularly interest rate adjustments, also influences Bitcoin prices. Traders closely monitor technical indicators such as the relative strength index (RSI) to gauge asset momentum, making it a vital focus in predicting potential price movements.

In summary, Bitcoin’s remarkable growth in the past week raises concerns about a possible 15% correction due to overbought conditions reflected in the RSI. While short-term declines may occur, the long-term outlook remains bullish, especially under the influence of favorable market conditions following the election. Historical trends support the potential for a significant price recovery as seasoned investors anticipate upward movements, positioning Bitcoin to potentially reach $100,000 soon.

Original Source: www.fxempire.com

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