At the moment Bitcoin is trading slightly above $91,000, setting new annual records and igniting a general uptrend in optimism. The overlay of the Bitcoin price and meme coin volume, however, points to a cautious approach. The magnitude of recent meme coin trading volume spikes is comparable to those of previous events that preceded Bitcoin market peaks.
The price chart for Bitcoin shows that it has risen parabolically in recent weeks. The asset may be due for a cooling-off period as indicated by the Relative Strength Index (RSI), which is circling close to overbought levels. High levels of activity are also evident in volume trends, which may indicate a shift from accumulation to distribution among larger holders. Even though it would be easy to think that this time is different, it is impossible to overlook the convergence of on-chain signals and historical data.
After surpassing crucial resistance levels at $70,000 and $80,000, Bitcoin is currently up against psychological resistance at $100,000. The strength of selling pressure may determine whether we witness a retracement to support levels of $78,000 or even $68,000 if meme coin activity signals another Bitcoin peak.
The behavior of the cryptocurrency market is still cyclical, and trends like these are frequently significant. In order to determine whether Bitcoin’s current rally has more room to grow or whether this spike in meme coin mania is actually an indication of an impending reversal, investors should monitor trading volume dynamics, on-chain activity and macroeconomic factors.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
