Crypto traders, having seen Bitcoin the largest cryptocurrency, rebounded overnight to $64,000 from a recent low below $60,000, and may be wondering if the bottom has been hit and a new bull run has begun.
There is a simple signal to obtain this confirmation. At present, he says the recovery has not started.
This signal comes from a widely followed momentum gauge called the Relative Strength Index, or RSI. The metric can range from 0 to 100. Readings above 70 indicate that an asset is overheated and potentially overbought, while readings below 30 suggest the opposite. Between these extremes, specific levels often appear as dividing lines between bullish and bearish environments.
For the price of Bitcoin, the line is at 41.5, according to crypto data analysis platform Material Indicators. Above this level, BTC has historically had a stronger argument for a macro uptrend. Below, bearish pressure tends to dominate.
“Right now, Bitcoin is below and continuing to fall,” Keith Alan, an analyst at Material Indicators, said in an email. “This doesn’t mean prices have to collapse, but it does mean the burden of proof still lies with the bulls.”
