The Bitcoin (BTC) price has risen by around 50 percent since the beginning of this year and by more than 150 percent since last September. Optimism is therefore enormous, but analysts say traders should be cautious. The rate is almost at one All-time highand would probably fall rather than continue to rise.
Bitcoin’s RSI is overvalued
Analysts at The Market Ear came to this conclusion in a research report last Thursday. The bi-weekly Relative Strength Index (RSI) for Bitcoin is now at 88. This level, along with price, has never been seen at the same time, suggesting that the hype is particularly extreme. Seeking a higher price appears to be a very late decision, the researchers conclude.
However, the RSI was often at a value of 88, such as in the bull markets of 2017 and 2020. An asset is already overvalued if the RSI is above a value of 70. This was usually followed by a correction or a consolidation phase, after which the price continued to rise several times. So observation is not a guarantee that the price will mainly fall from here.
Bitcoin ETFs and halving good for price?
A lot has happened recently that has made traders bullish on Bitcoin. The main factor is probably the US approval of 10 spot exchange-traded funds (ETFs). Securities and Exchange Commission (SEK). As a result, billions of US dollars have flowed into Bitcoin. It caused the largest growth of crypto exchange funds ever. Daily capital inflows were even greater than what the miners could produce.
Speaking of miners; The next Bitcoin halving is expected to take place at the end of April. As before, miners will only receive half of the Bitcoins per block mined on the blockchain. According to many analysts, this will lead to further price increases. At the same time, it is expected that it will become significantly more difficult for many miners to make profits. Mining also costs a lot of money.
