• Bitcoin’s daily RSI shows overbought conditions as the asset approaches a critical resistance zone near its previous all-time high.
  
• A Bearish Order Block and Fair Value Gap align at resistance, creating a high-probability reversal area that traders are monitoring closely.
  
• Risk-to-reward remains favorable, with a stop loss positioned 4% below the ATH, attracting attention from short-term technical traders.

Bitcoin is trading in an overbought position, as indicated by the daily RSI, and this is prompting short-term market caution among players.

RSI Signals Short-Term Caution for Bitcoin

Crypto analyst Ali_charts recently indicated that Bitcoin's daily Relative Strength Index (RSI) is in overbought levels. This price momentum-measuring metric is currently warning of caution as Bitcoin approaches crucial levels of resistance.

When the RSI is above 70, it generally means an asset is overbought. This level of reading tells us that short-term price strength is likely to be unsustainable. Traders are paying close attention, as historically, overbought levels of RSI have resulted in short-term corrections or consolidations.

With Bitcoin nearing its all-time high, this overbought reading becomes more relevant. Momentum may slow if buying pressure weakens at resistance. The market’s next move could depend on whether this condition results in a pause or reversal.

Bearish Technical Zone Aligns with ATH

Another analyst Crypto Patel pointed out that Bitcoin is now at a critical level on the daily chart. A Bearish Order Block (OB) and a Fair Value Gap (FVG) are aligned just below the all-time high. This combination creates a high-probability reversal zone, especially when paired with the overbought RSI reading.

If Bitcoin is rejected at this zone, the price could drop below $100,000. Traders are watching for signs of weakness as the price tests this area. The alignment of the OB and FVG adds technical strength to this resistance.

However, a breakout above the all-time high could trigger strong momentum. Patel stated that such a move might push Bitcoin toward the $120,000–$130,000 range. The reaction at this level will likely define the short-term direction.

Tight Risk Margin as Volatility Builds

Patel mentioned that the current setup offers a low-risk trade, with a stop loss of only about 4% from the ATH. This tight margin attracts traders seeking high reward potential with limited downside exposure.

Bitcoin’s current overbought condition, combined with strong resistance levels, has created a decisive moment. The coming days may determine whether the asset continues its rally or enters a corrective phase.

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