Bitcoin hits $ 14.7,000 – 3 reasons this rally could make new all-time highs


From November to December 2017, the price of Bitcoin (BTC) experienced a parabolic upward trend to a new all-time high of $ 20,000.

There are three reasons why Bitcoin could see a similar trend in the coming months. First, the post-halving cycle comes into effect. Second, the relative strength index (RSI) shows room for a bigger rally. Third, at least in the derivatives market, the rally has not overheated.

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Long-term RSI shows that Bitcoin is not overbought

PlanB, the inventor of the Stock to Flow (S2F) indicator, shared a long-term RSI chart from Bitcoin. The indicator that measures whether an asset is overbought or oversold shows that BTC is still at a neutral level.

Bitcoin Relative Strength Index (RSI). Source: PlanB

Although Bitcoin rose from $ 10,500 to $ 14,600 in a month, the RSI shows that there is room for more upside potential.

Bitcoin’s RSI exceeded 95 points in December 2017. When the RSI crosses 75 points, traders begin to view the asset as overbought. Currently, BTC’s long-term RSI shows it is below 70 points.

The cycle after the halving materializes as in the past

In 2017, one of the top reports on Bitcoin’s boom was its halving in 2016. A block reward halving, happening roughly every four years, causes the rate at which BTC is produced by miners to drop by half.

Bitcoin’s slower production is causing a general decline in BTC inflows into exchanges, leading to a decline in supply.

The last halving was in May 2020, and in 2017, Bitcoin started rallying months after the halving was activated. Bitcoin’s ongoing rally is in line with previous macro rallies.

No overheated rally, fewer sellers on the spot market

For the past five days, Bitcoin’s funding rate has remained negative on major exchanges, particularly Binance Futures. This shows that the majority of the futures market has cut BTC.