Benzinga - Bitcoin (CRYPTO: BTC) is on a bullish run, but analysts are warning latecomers about the potential risks of joining the rally at this stage.
What Happened: Bitcoin has seen a 40% increase in just four weeks, adding nearly $19,000 in the past month.
This bullish market condition often entices short-term traders and speculators, who missed the early rally, to jump in using riskier leveraged products like futures.
However, The Market Ear, a news and analysis website, suggests that chasing the rally now may be risky, reported CoinDesk.
"Bitcoin [14-day] RSI at 88. We have not seen RSI this overbought AND bitcoin trading at these absolute levels, ever," analysts at The Market Ear said in Thursday's edition of the newsletter. "Chasing it here looks like a very late trade," they added.
See Also: This Trader Turned $2,708 Into $3.25 Million With Trump-Related MAGA Memecoin
The Relative Strength Index (RSI), a momentum indicator that measures the speed and change of price movements over a set period, reflects overbought conditions when it reads above 70.
This suggests that the asset’s price may correct lower soon. Bitcoin’s current value relative to the RSI calls for caution among speculators looking for a long entry at the going market rate.
Why It Matters: Despite the warning, analysts maintain that Bitcoin's big picture remains bullish, with a potential price of $120,000 and higher by September 2025.
This aligns with the prediction made by Caleb Franzen, founder of Cubic Analytics, who suggested that Bitcoin could potentially reach a high of $180,000.
Furthermore, cryptocurrency analyst Kevin Svenson predicts that Bitcoin could reach new all-time highs before the upcoming halving event in April. However, he also warns of potential downside risks following the event.
Price Action: Bitcoin was trading 1.6% higher in the last 24 hours, according to Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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