Bitcoin price is currently trading close to $ 58,000, just under $ 10,000 below the ATH and back into pricing mode.
In addition, the price is also preparing to break into the bullish zone of the RSI chart. This is the area that once led to cycle highs and the bear market that followed.
Strong RSI “bullish zone”
BTC is currently behaving differently from other assets. Its speculative nature allows it to follow a fairly accurate but very volatile pattern of technical analysis.
On the other hand, in some cases, when FOMO starts, even technical indicators gradually become irrational. For example, the Relative Strength Index (RSI) is an oscillator that lets traders know when an asset is oversold or overbought. When the index is above 70, the asset is in an overbought condition and nearing the end of the trend.
On the lower time frames, this can help find short-term highs. But on higher time frames, an RSI above 70 tends to signal that bulls are working hard and that very few obstacles can stop them.
Bitcoin RSI will soon reach over 70 | Source: TradingView.com
The monthly time frame also reveals another anomaly: Bitcoin price never entered the oversold zone on the monthly RSI chart.
All of this is happening as both Bitcoin price and RSI begin to build on a parabolic basis. As such, the cycle is not over yet and another upswing is imminent.
Trend line separates bull and bear markets
Another look at the RSI and the descending trend line (dotted line) can provide clues as to where the trend will end. The RSI falling below 70 would confirm that a bear market is here.
Bitcoin’s return to the bullish zone will put the bulls back in control of the price but depends on a month close above 70 to trigger this.
A rally for $ 65,000 to a new ATH this month will support the bulls. If successful, the parabola will bring the leading cryptocurrency by market capitalization closer to USD 80,000.
Next, the price could hit $ 100,000 or more, and then sentiment is expected to end abruptly, similar to the RSI at the end of each cycle.
Conversely, an RSI decline below 70 this cycle would be a confirmed bear trap in October, or the shortest time for an upward zone in all of Bitcoin’s history.
You can see the Bitcoin price here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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