Bitcoin has reached its annual high again, breaking the $42,000 mark. Over the past seven weeks, the price of the cryptocurrency has formed a series of weekly bullish candlesticks, indicating continued growth.
Several technical indicators indicate that the bitcoin market may already be in the overbought zone, and the $42,000 level may represent strong resistance. However, there are also signals that were observed in previous bull markets in the periods after halving. The question arises whether this time the market can not wait for halving and continue the upward trend of BTC.
Since the beginning of October 2023, the price of BTC has been growing rapidly, increasing from $27,000 to $42,000 in just 7 weeks.
The weekly chart shows that BTC has reached a strong long-term resistance level, which may become the ultimate goal of the current growth. This resistance level is associated with the Fibonacci retracement level of 0.5 from the historical maximum (ATH) to the cyclical minimum of November 2022. In addition, the $42,000 level is a historical ATH since January 2021.
The relative strength index (RSI) on the weekly chart continues to grow and is at the level of 81, which indicates that the market has been overbought for 6 weeks. This may indicate a potential correction.
However, in an accelerating bull market, the RSI may remain in the bullish trend zone for several weeks, as it was in late 2020 and early 2021, when the RSI peaked at 95 along with bitcoin's rise to $42,000.
Different analysts have different perspectives on the future of BTC. Some emphasize the importance of the $42,000 level as a resistance area, while others refer to indicators that predicted previous bull markets.
It is important to note that the price behavior around $42,000 will be a key factor in determining the future prospects of BTC. If this level really becomes a strong resistance, a correction can be expected. Otherwise, BTC may move towards the next target of $48,500, taking into account the return of the RSI to the overbought zone.
