bitcoin, the world's most valuable currency, once again deviates from historical norms. According to a analysis According to a crypto analyst, the coin is in the “overbought” territory of the Relative Strength Index (RSI) for the first time in the run-up to the halving. The RSI is a popular technical indicator that analysts use to measure the price momentum of traded instruments.
bitcoin overheating? RSI is above 70
The analyst notes 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's history that this has happened before a halving.
The bitcoin network will halve miner rewards in mid-April. This event, which occurs approximately every 200,000 blocks, will reduce the rewards distributed to miners by 50% from 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 clear boost for the currency. It suggests that prices are not only breaking historical trends but also building strong momentum.
In addition to the strong bullish momentum, the analyst notes that bitcoin is now trading 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 is likely to rise further in the coming weeks, surpassing the recent all-time high of around $73,800.
btc pegged below $73,000 and consolidating
So far, bitcoin prices are holding firm and have increased, as evident from the daily chart. After sharp contractions in recent trading sessions, the welcome weekend reversal lifted the coin towards 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 further demand. So far, prices are moving sideways within a wide range despite signs of strength conveyed by other indicators.
While some investors are optimistic and expect prices to rise, caution should prevail. A close above $74,000 would push bitcoin into uncharted territory. Beyond this, 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.
Featured image of DALLE, TradingView chart
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