Bitcoin Price Prepares To Blast Off Back Into RSI “Bull Zone”
October 13 2021 - 5:25PM
NEWSBTC
Bitcoin price is back at nearly $57,000 and is less than $10,000
away from a new setting a new all-time high and heading back into
price discovery mode. It is also moments away from re-entering the
RSI bull zone, which in the past has led to cryptocurrency cycle
climaxes and a bear market to follow. Here is a closer look and
what to watch for. Bitcoin Price Readies Aggressive RSI “Bull Zone”
Reentry Bitcoin price action doesn’t behave like other assets. Its
speculative nature helps it to follow technical analysis well, but
remains highly volatile. But in some cases, when FOMO begins, even
technical indicators begin to behave irrationally. The Relative
Strength Index, for example, is an oscillator that tells a trader
when an asset is oversold or overbought. The idea is that when a
reading is above 70 an asset is overbought and nearing the end of
its trend. Related Reading | How 90-Year Old Market Wizardry
Predicted The Bitcoin Breakout On lower timeframes, this can help
to find short-term tops, but on higher timeframes, going above 70
tends to signal that bulls are out in full force, and very little
will stop them. Bitcoin is about to reach above 70 on the RSI |
Source: BTCUSD Index on TradingView.com The same monthly timeframe
also shows another anomaly: Bitcoin price has never gone into
oversold territory according to the monthly RSI. This is all
happening while both Bitcoin price and the RSI itself are beginning
to build upon a parabolic base. All this behavior suggests that the
cycle isn’t over, and another wave up is about to ensue. The Trend
Line Separating A Bull And Bear Market A different look at the RSI
and a descending trendline, drawn with a dotted line below, could
provide a clue as to where the trend will end. Falling back below a
reading of 70 will confirm a bear market is here. Could BTC top out
at the descending RSI trend line? | Source: BTCUSD Index on
TradingView.com The reentry into the bull zone should cause bulls
to take control over Bitcoin price once again, but is contingent
upon a monthly close above a reading of 70 to ignite the spark.
Pushing through beyond $65,000 to a new all-time this month would
do the trick. If that happens, parabola should take the top
cryptocurrency by market cap closer to $80,000 per coin. Related
Reading | Bulls Regain Control Over Bitcoin Trend Strength: What To
Expect That would leave very little room between that level and the
promised land of $100,000 and above – where the coming mania will
likely come to an abrupt end, much like the same RSI has shown
happens at the conclusion of each cycle. Falling below 70 during
this cycle will either be a bear trap that is confirmed this month,
or the shortest time spent on the bull zone in Bitcoin’s entire
history – which one is it? Follow @TonySpilotroBTC on Twitter or
via the TonyTradesBTC Telegram. Content is educational and
should not be considered investment advice. Featured image
from iStockPhoto, Charts from TradingView.com
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