Is this half price target sustainable?

Bitcoin (BTC) hit a yearly high of $41,745 during this morning's Asian session. The largest cryptocurrency closed its 7th bullish week in a row and continued its upward movement toward long-term resistance at $42,000.

Several technical indicators show that Bitcoin is already in the overbought range and the $42,000 level may offer strong resistance. However, there are also signs of previous bull markets in post-halving periods. Will the market not wait for this time to halve, and the price of BTC will continue its upward trend?

Bitcoin (BTC) reaches a high and long-term resistance every year

Since mid-October 2023, the price of BTC has been increasing rapidly. Bitcoin increased from $27,000 to just below $42,000 in a 7-week period. This is an upward movement of 55%.

The weekly chart shows that Bitcoin is currently reaching a strong long-term resistance area (red line). It can serve as a target for the current upward phase. This resistance indicates a 0.5 Fib retracement of the descending all-time high (ATH) to the November 2022 cycle low. Additionally, the $42,000 level is the historical ATH from January 2021 (blue circle).

Market traders use the Relative Strength Index (RSI) as a momentum indicator to identify overbought or oversold conditions. Also, based on it, you decide to store or sell assets.

Readings above 50 and up indicate that the bulls are still dominant, while readings below 50 suggest the opposite.

The weekly RSI for Bitcoin is rising and is at 81. Moreover, it has been in an overbought area for 6 weeks now. This indicates a bullish market, which may indicate an impending correction.

However, in an accelerated bull market, the RSI could remain in bullish territory for several weeks, as it did in late 2020 and early 2021. At that time, it is worth mentioning that the RSI reached 95 when Bitcoin hit $42,000.

What do analysts say about Bitcoin?

Analysts at X are divided on the future view of BTC price. For example, @jasonpizzino suggests that the main resistance area is now at $42,000.

Moreover, he compares the current price action with a fraction of the parabolic movement of April 2019. In his opinion, $42,000 is a long-term target and will serve as resistance before it halves next year.

Another comment by @TechDev_52 posted on X about Vortex Indicator (VI) analysis. It indicates that an unusual signal (green) has appeared on the monthly chart prior to previous bull markets. After a flash, Bitcoin reaches the top of the cycle in 4 to 10 months.

However, if this characterization of bullies turns out to be correct, half of the narrative seems shaky. All previous symptoms appeared after successive halving. Moreover, most market participants believe that the bull market in cryptocurrencies is due to the halving of BTC miners' rewards.

However, if this time is different, perhaps the importance of the upcoming halving will no longer be fundamental. The commentator summed it up.

“While most are expecting half, it's not liquidity.”

BTC Price Prediction: Is the Market Awaiting a Correction?

The response to the $42,000 level will determine the further view of the BTC price. According to the above analysis, if this position is a strong resistance, a correction should be expected. The daily chart shows that the first target is the 0.382 Fib retracement of the recent upward move at the $36,000 level.

If this support fails to hold, Bitcoin could drop further to the $34,100-$32,400 range, which corresponds to the 0.5-0.618 Fib levels. This move could confirm the July 2023 resistance as support (green line).

On the other hand, if Bitcoin continues to rise and crosses the key $42,000, the next target is $48,500. This position is marked by the long-term 0.618 Fib retracement from the ATH to the bottom of the cycle.

The RSI indicator, which has now returned to the overbought position above 70, suggests this may be the case.

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