Bitcoin, the world’s most valuable currency, is once again deviating from historical norms. According to a analysis by a crypto analyst, the coin is in the Relative Strength Index (RSI) “overbought” territory for the first time ahead of the halving. RSI is a popular technical indicator that analysts use to assess the price dynamics of traded instruments.
Bitcoin Overheating? RSI is above 70
The analyst highlights that Bitcoin’s RSI on the monthly chart is currently above 70, indicating an overbought and overheated condition. This is a significant development as it is the first time in Bitcoin history that this has happened before the halving.
The Bitcoin network is scheduled to halve miner rewards in mid-April. This event, which occurs approximately every 200,000 blocks, will cut rewards distributed to miners at 50% of the current level of 6,125 BTC. Miners play a vital role in confirming transactions and maintaining network security.
The fact that Bitcoin prices appear to be “overheating” just before the halving is a bullish sign for the currency. This suggests that prices are not only breaking historical trends but also building strong momentum.
In addition to the strong positive momentum, the analyst notes that Bitcoin now trades above a critical dynamic level on the monthly chart.
The confluence of these positive developments could explain why traders are optimistic. Most analysts agree that the currency will likely rise in the coming weeks, surpassing the recent all-time high of around $73,800.
BTC Fixed Below $73,000 and Consolidated
So far, Bitcoin prices are holding steady, increasing as evident on the daily chart. After sharp contractions in recent trading sessions, the welcome reversal over the weekend lifted the coin to the elusive $70,000 level and a previous all-time high.
However, judging by the arrangement of the candles on the daily chart, a break above $73,800 would likely catalyze more demand. So far, prices have been moving sideways in a wide range despite signs of strength conveyed by other indicators.
Although some investors are optimistic, expecting prices to rise, caution should prevail. A close above $74,000 would push Bitcoin into uncharted territory. Furthermore, the analyst uses technical indicators to make projections. These tools use historical parameters and delays. As such, they may not be as accurate and therefore misleading in some cases.
DALLE Featured Image, Chart from TradingView
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