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<ul><li><a href="https://markets.businessinsider.com/currencies/btc-usd"></a><a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin's</a> massive leap since Wednesday may have gone too far, too fast.</li><li>The world's most popular cryptocurrency surged above $13,000 on Wednesday and continued to climb through the week after PayPal announced its users will soon be able to buy, sell, and hold <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword>.</li><li>Yet the token's 14-day <keyword id="839604" type="PERSON" weightage="60" keywordseo="Relative-strength-index">Relative Strength Index</keyword> passed 80 in Thursday trading.</li><li><keyword id="260600" type="ORGANIZATION" weightage="60" keywordseo="RSI">RSI</keyword> is a popular gauge of price momentum, and readings over 70 typically signal an asset is overbought.</li><li><a href="https://markets.businessinsider.com/currencies/btc-usd">Watch bitcoin trade live here</a>.</li></ul><a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin's</a> rally through the week might have moved too quickly for investors.The world's largest cryptocurrency on Wednesday <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-highest-paypal-cryptocurrency-adoption-novogratz-btc-rally-2020-10-1029705902?utm_source=markets&amp;utm_medium=ingestgest">leaped above $13,000 for the first time since July 2019</a> and hovers around that level as new backers rush to the digital token. The surge began when PayPal announced Wednesday morning that its users will soon be able to buy, hold, and sell <keyword id="2721952" type="PERSON" weightage="60" keywordseo="crypto">crypto</keyword>currencies on its platform. Billionaire investor Mike Novogratz called PayPal's move "the biggest news of the year in crypto."Yet the coin's 14-day Relative Strength Index suggests the rally got ahead of itself. The popular technical measure is used to gauge an asset's momentum and determine whether it's overbought or oversold.Bitcoin's RSI jumped above 80 in Thursday trading and remained there in early Friday trading. Values above 70 suggest the asset is overbought and might be due for a reversal.Read more: <a href="https://www.businessinsider.com/election-investing-strategy-portfolio-recommendations-trades-biden-presidency-democrat-sweep-2020-10">A fund manager at a $468 billion firm pinpoints 7 portfolio moves to make right now in anticipation of a Biden presidency and Democrat-run government</a>The cryptocurrency traded above $13,000 early Friday before falling slightly. Though its momentum has slowed since Wednesday's uptick, the coin remains near its 2020 high and is up roughly 20% this month alone.Much of the new interest in bitcoin stems from its potential use as a hedge against inflation. The Federal Reserve's updated policy framework signals policymakers will pursue temporary bouts of price growth above 2%. The strategy has investors searching for insulated assets, and bitcoin's decoupling from monetary policy has led some financial industry titans to back the volatile asset.Hedge-fund manager Paul Tudor Jones deemed the coin "<a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-rally-best-inflation-trade-tudor-jones-cryptocurrency-btc-2020-10-1029711282">the best inflation trade</a>" on Thursday, adding that he thinks its rally is only in its "first inning."Bitcoin traded at $12,959.14 as of 8:30 a.m. ET Friday, up 79% year-to-date.Now read more <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> coverage from Markets Insider and Business Insider:<a href="https://www.businessinsider.com/us-weekly-jobless-claims-unemployment-insurance-benefits-filings-fall-economy-2020-10">US weekly jobless claims fall more than expected to 787,000 as labor-market rebound shows strength</a><a href="https://markets.businessinsider.com/news/stocks/wall-street-first-half-profits-highest-2009-trading-underwriting-stimulus-2020-10-1029712159">Wall Street's first-half profits rocketed 82% to their highest since 2009</a><a href="https://www.businessinsider.com/investing-strategy-position-portfolio-us-election-jp-morgan-2020-10">Don't put too much energy into predicting the result -- 5 key tips for clients from strategists at JPMorgan's $1.9 trillion asset management arm with less than two weeks to go to the election</a><a href="https://markets.businessinsider.com/currencies/btc-usd"><div type="image" title="BTC" height="1078" width="1452" msid="78830725" hostid="261"></div></a>

One technical indicator signals bitcoin can lose steam after 10% PayPal rally

<ul class="summary-list"><li>The stock market could face a 7% correction by mid-November, says Fundstrat's Mark Newton.</li><li>Investor complacency and weak seasonals could trigger decline, according to Newton.</li></ul>The stock market looks poised for a 7% correction by mid-November, according to technical analyst Mark Newton of Fundstrat.Newton told clients in a note on Thursday that he is expecting the <a target="_blank" class="" href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> to see weakness heading into November as investor sentiment hits complacent levels just ahead of the general election on November 5."While intermediate-term bullish these remains very much intact, it's doubtful that US Equities continue to push up into and post-election without any consolidation," Newton said.Newton said the potential correction he expects in the stock market is likely to be a "short-term correction only" and "not the start of a larger decline," playing into Fundstrat's Tom Lee's consistent message that investors should view any decline in the stock market as a "buy the dip" opportunity.Newton is monitoring the 5,900 level on the S&amp;P 500 as potential resistance for the index. The S&amp;P 500 traded at around 5,850 on Friday."The issues with near-term complacency (as judged by low Equity put/call levels), waning breadth, poor seasonal trends and cyclical projections for November as well as SPX's largest sector, Technology, not performing well of late, are all reasons to be alert for possible trend change in the weeks to come," Newton explained.One "key reason" Newton is turning bearish in the short-term is that the current rally in stocks that started in early August is 88 days long, which is exactly how long the April 19 to July 16 rally lasted before a sell-off materialized.From a time perspective, that's "why this rally might 'run out of steam," Newton said.Other areas of technical weakness that Newton is monitoring includes negative divergences in momentum as measured by the RSI and the moving average convergence divergence (MACD) indicators, a lack of bearish investors as measured by the AAII investor sentiment data, and seasonal cycles that show a peak in the stock market in mid-to-late October followed by a sell-off through November."This market has seemingly 'dodged a bullet' thus far during one of the historically worst periods during most election years. However, investors should not take this to mean that the coast is clear for an interrupted rally higher all year," Newton said.

Why the stock market will drop 7% by mid-November, according to a technical analyst

<ul class="summary-list"><li>China has added to its gold coffers for 16 months in a row, Bloomberg data shows.</li><li>Gold hit new record highs this week, hovering at $2,162 an ounce on Thursday.</li></ul>China's <a href="https://markets.businessinsider.com/commodities/gold-price">gold-buying spree</a> has been going strong for 16 consecutive months. The People's Bank of China added roughly 390,000 troy ounces of the key metal in February, according to government data cited by <a href="https://www.bloomberg.com/news/articles/2024-03-07/china-s-gold-splurge-reaches-16th-month-as-prices-hit-record">Bloomberg</a> on Thursday. In total, China's central bank holds 72.58 million troy ounces of gold, or roughly 2,257 tons. On Thursday around 10:00 a.m. in New York, the price of gold hovered at a record high of $2,161.90. It's up 5.25% in the last five days, and 18.77% in the last 12 months. The World Gold Council reported that central banks bought 1,037 tons of gold in 2023, just below the all-time record from 2022. Central bank buying activity has helped the commodity's rally, but recently traders' expectations for rate cuts from the Federal Reserve have also helped fuel price gains. China's move to build up its coffers with gold, which other central banks around the world have also made over the last year, points to its continued push toward diversifying its holdings, with the goal of <a href="https://www.businessinsider.com/us-dollar-war-global-fight-america-economy-dominance-reserve-currency-2023-7">becoming less reliant on the US dollar.</a>The country is part of the BRICS economic bloc — Brazil, Russia, India, China, and South Africa — which has shared ambitions to <a href="https://markets.businessinsider.com/news/currencies/dedollarization-dollar-dominance-new-brics-china-yuan-currency-sanctions-debt-2023-12">cut into the global dominance</a> of the greenback.In any case, demand for gold in China is high, based on the volume of Swiss exports to the country. That nearly tripled in January, Bloomberg data shows, and the bullion binge comes as the country's <a href="https://markets.businessinsider.com/news/stocks/china-outlook-economy-beijing-stock-market-rescue-property-real-estate-2024-1">stock market</a>, <a href="https://www.businessinsider.com/china-economy-deflation-markets-property-real-estate-housing-beijing-2023-8">economy</a>, and <a href="https://www.businessinsider.com/china-economy-beijing-lehman-moment-policy-deflation-economy-markets-property-2023-8">property sector</a> remain on shaky ground.Historically, investors pile into the safe-haven asset of gold as a hedge against economic tumult or inflation. "Gold is now the most overbought since March 8, 2022 where it peaked and declined from $2,050 to $1,650," Bank of America strategists wrote in a note on Wednesday. "While we are not calling for that, it is rational to expect price momentum to slow at some point and/or price to dip in given stretched daily RSI conditions."

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One technical indicator signals bitcoin can lose steam after 10% PayPal rally

Ben Winck

Why the stock market will drop 7% by mid-November, according to a technical analyst

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China has snapped up a huge amount of gold for 16 months in a row

Phil Rosen

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