Bitcoin: Is it too late to participate in the rally?

Bitcoin reached BTCThe largest digital currency by market capitalization, Sharp rise It has surpassed 40% in just four weeks, approaching a new record high of $69,000.

This strong rally often attracts short-term traders and speculators who missed the initial rise. Participate aggressively using leveraged products such as futures, seeking to maximize profits and compensate for their lack of early participation.

It's too late?

According to The Market Ear, a news and analysis website. Participating in the current rally can be risky, especially for short-term traders and speculators.

Analysts at The Market Ear said in... newsletter Thursday: “Bitcoin's RSI (14-day time frame) is at 88. We have never seen the RSI reach this high and Bitcoin is trading at these all-time highs. »

“The currency hunt here looks like a very late deal,” the analysts added.

Relative Strength Index (RSI)

The Relative Strength Index (RSI) is an analytical tool that measures how quickly asset prices move over a specific period of time. A period of 14 days or 14 weeks is often used.

A number above 70 indicates "overbought", or a situation in which asset prices have increased consecutively for a prolonged period, or have increased too quickly, which could lead them to correct downward soon.
Read also: How to Use the RSI Indicator in Cryptocurrency Trading

The importance of the indicator for speculators and investors

The increase in the relative strength index (RSI) to this level is unprecedented, with Bitcoin price remaining above $60,000.

The index did not exceed 75 the last time Bitcoin traded above $60,000 in early 2021 and November 2021.

This current value of Bitcoin relative to the Relative Strength Index (RSI) lends credence to the “overbought” warning, making speculators looking to engage in long trades cautious.

Long-term investments In Bitcoin

However, the relative strength index (RSI) is not an absolute indicator, as markets often maintain a strong upward trajectory for days and weeks, keeping the index above 70 for a long period of time.
Read also: Beyond $60,000 for Bitcoin: New Factors for Continued Bullish Enthusiasm

According to Newton's law, "a body in motion continues to move at the same speed and in the same direction unless an unbalanced force acts on it."

Therefore, an "overbought" figure is of little significance to existing or new investors who rely on the "buy and hold" strategy for long-term growth. Investors generally don't care about short-term price fluctuations and focus on the bigger picture.