Bitcoin looks stretched by the usual momentum gauges, but that reading has been a buy signal rather than a warning in past trending markets — bullish for holders.

• Bitcoin's short-term momentum gauge is running hot, well past the level traders normally call "overbought."
• In past cases, that same setup was followed by a typical gain of about 28.5% rather than a drop.
• The longer daily momentum reading is also turning up at the same time, which is what makes the signal stronger.
• The core argument: in a market that is clearly trending, "overbought" readings mean strength, not an imminent top.

Outlook: Momentum points higher for Bitcoin in the coming weeks unless the daily trend signal rolls back over.