Bitcoin is “Overheating” For The First Time Ever Before Halving
March 25 2024 - 3:00PM
NEWSBTC
Bitcoin, the world’s most valuable coin, is once again deviating
from historical norms. According to an analysis by one
crypto analyst, the coin is in the “overbought” territory of the
Relative Strength Index (RSI) for the first time in the lead-up to
halving. The RSI is a popular technical indicator analysts use to
gauge the price momentum of traded instruments. Bitcoin
Overheating? RSI Stands Above 70 The analyst points out that the
Bitcoin RSI on the monthly chart is currently above 70, indicating
an overbought condition and overheating. This is a significant
development as it’s the first time in Bitcoin’s history that this
has happened before a halving. The Bitcoin network is set to
halve miner rewards in mid-April. This event, which occurs roughly
every 200,000 blocks, will cut 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.
Related Reading: Bitcoin ‘Real Pump’ Nears New All-Time Highs,
Analyst Says The fact that Bitcoin prices appear to be
“overheating” just before halving is net bullish for the coin. It
suggests that prices are not only breaking from historical trends
but also building strong momentum. Besides the strong upside
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 upbeat.
Most analysts agree that the coin will likely break higher in the
weeks ahead, clearing the recent all-time high of around $73,800.
BTC Pinned Below $73,000 And Consolidating Thus far, Bitcoin
prices are firm, increasing as evident in the daily chart. After
sharp contractions in the past few trading sessions, the welcomed
reversal over the weekend lifted the coin towards the elusive
$70,000 level and a previous all-time high. However, judging from
the candlestick arrangement in the daily chart, a break above
$73,800 would likely catalyze more demand. So far, prices are
moving sideways within a broad range despite signals of strength
relayed from other indicators. Related Reading: Why Is The Price Of
LUNC And USTC Up Today? While some investors are bullish, expecting
prices to rise, caution should prevail. A close above $74,000 would
thrust Bitcoin into unchartered territory. Beyond this, the analyst
uses technical indicators to make projections. These tools use
historical parameters and lag. As such, they may not be as accurate
and, thus, misleading in some instances. Feature image from DALLE,
chart from TradingView
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