Area exit – The Bitcoin (BTC) price seems to be stuck halfway through $21,000-$22,000. This indicator gives clues as to the next movements of the cryptocurrency, after the strong increases of recent days.
Daily RSI and Bitcoin Price: Lessons from the Past
Bitcoin price rises to $21,518 on Bitfinex today, January 17, 2023. Cryptocurrency is trading at $21,298 at the time of writing this article. Its price is currently registering a daily gain of nearly 0.50%.
After the recovery from $21,000, is a bullish continuation possible for Bitcoin in the very short term, or should the markets expect a strong correction? Trader’s analysis Scott Melkerwhich are based on the value of the RSI on a daily basis, provide some answers.
Scott Melker shared a chart that shows the recent explosion of this RSI. This jump allowed him to get out of the zone in which he has been evolving for months. Bitcoin’s Daily RSI ‘Cools to just under 90 ” currently.
Scott Melker points out that when this indicator “reached 90 a few times”, the markets were entitled to a correction, before a rise and a bearish divergence. The last time this RSI hit 90, the price of Bitcoin fell from $40,000 to $30,000, before rallying all the way back to $65,000.
Scott Melker also points out that when the daily RSI last broke above that 90 mark – to climb up to around 94 – the price of Bitcoin had then reached the peak of $20,000 in 2017.
Given the current value of the RSI, if the past scenarios based on this indicator were to reproduce, the price of Bitcoin could therefore undergo a relatively significant correction initially, before significantly exceed current local highs.
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The monthly RSI to confirm the solidity of recent rises
Scott Melker is not the only trader with an interest in RSI. the trader Rekt Capital also shared his analyzes based on this indicator, but on a different time scale. He posted a chart that shows Bitcoin’s monthly RSI is currently at ” above the previous bear market area (green) “.
The monthly RSI has remained in this zone for much of 2022. According to Rekt Capital, Bitcoin must now transform this area in support “and RSI is doing everything it takes to achieve that goal.”
In the absence of confirmation of a flip of this zone, a bullish continuity for the price of Bitcoin thus remains uncertain at this stage.
Bitcoin price is struggling to break through $21,300-$21,575. The area contains at least three key resistances, which could send the cryptocurrency back below $20,000. Is a relatively long break in order for the bulls after their long run since the start of the year?
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