Bitcoin: weekly RSI still low
Bitcoin: weekly RSI still low
Bitcoin

Bitcoin: weekly RSI still low

By Marco Cavicchioli - 19 Oct 2021

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Bitcoin’s weekly price RSI indicator is still low, despite recent increases. 

RSI and technical analysis of Bitcoin variations

This has been pointed out by analyst TechDev on Twitter, saying that even on the bi-weekly, the index is still at 68, while during real peak periods it should typically rise around 93-94. 

The Relative Strength Index (RSI) is an indicator used in technical analysis that measures the magnitude of price changes over a given period of time to assess whether an asset is overbought or oversold. 

Its value can oscillate between 0 and 100, and an asset is interpreted as overbought when the RSI is equal or superior to 70 and oversold when the RSI is equal or inferior to 30.

Taking periods of a single day into account, the RSI on the price of Bitcoin would be about 73 points, i.e. overbought, but considering periods of a week the value of the RSI would fall to 67, i.e. in the neutral zone. 

The daily evolution of the price of BTC is less relevant than the weekly or monthly unless one operates on crypto markets with very short time horizons, so the weekly RSI is a more interesting indicator than the daily to assess the current trend. 

Bitcoin RSI
Bitcoin could reach a new ATH in the coming weeks

TechDev on Bitcoin’s all-time highs

TechDev notes that in similar situations in the past the price of Bitcoin has risen further, and in fact suggests that the uptrend could continue in the coming weeks, possibly taking BTC to new all-time highs. 

Currently, the price of Bitcoin is only 4% below its all-time high of nearly $65,000 in mid-April, and with a weekly RSI below 70, a significant short-term decline would not be particularly likely. 

The technical picture seems to suggest that the bull run may not have stopped yet and that Bitcoin’s price may still have a lot of upside potential.

It is worth noting that very often in the past, annual highs have been reached between November and December, and in particular in the two years following the previous halving, i.e. in 2013 and 2017. Given that 2021 is the year following the third halving, and given that the halving is Bitcoin’s most important monetary policy measure, many expect a similar trend to be repeated in late 2021. 

Bitcoin and growth potential

On the other hand, however, excessive expectations are often dashed in the financial markets, so there is also the possibility that what many believe should happen will not come true. 

The data would seem to suggest quite clearly that the current trend is one of growth and would remain so even after a 30% increase in the last 30 days. 

While there is always the theoretical possibility of a retracement, very few people seem to be betting on such an eventuality at the moment. 

For example, the Fear&Greed index is currently stuck at around 75, which is much lower than the level it was at when the price of Bitcoin rose so high that it was ready to fall. 

In other words, there are no major indicators suggesting that the price could fall in the coming days, while there are many that would indicate further upside potential. It remains to be seen whether such a picture is not too predictable, and could lead to sensational surprises in the opposite direction. 

 

Marco Cavicchioli

Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded ilBitcoin.news and the Facebook group" Bitcoin Italia (open and without scam) ".

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