BITCOIN FINALLY CORRECTS

BITCOIN CORRECTS VERY OVERBOUGHT CONDITION...The rally in bitcoin over the past year has been nothing short of spectacular.  The daily bars in Chart 1 show how big that gain has been.   Prices have gone from $4000 in the spring to $40000 last week.  It also doubled in price from $20000 since December.   Those types of gains are hard to sustain without some profit-taking along the way.   Which it's finally seeing this week.    Its 14-day RSI line in the upper box is also pulling back from a very overbought condition near 90.   Let's take a closer look.

BITCOIN MAY RETEST JANUARY LOW... The daily bars in Chart 2 shows bitcoin falling sharply today and in heavy trading.  In addition, its 14-day RSI line in the upper box has fallen back to 50 which is a test of its previous low hit during December.  Its daily MACD lines in the middle box have contracted sharply, but remain positive.  The next potential test of support could take place near 28,500 which was its intra-day low hit earlier in the month (see circle).   The hourly bars in Chart 3 show a potential zone of support ranging from 30,000 down to 28,500.