A well-known crypto analyst suggests that Bitcoin (BTC) might soon turn bullish due to a crucial indicator.
In a recent update, crypto trader Rekt Capital informed his 542,500 followers on the social media platform X that the Relative Strength Index (RSI) – a momentum indicator that signals overbought or oversold conditions – may be on the verge of breaking out of its downtrend, indicating a bullish outlook for Bitcoin.
“Moving forward, it will be interesting to monitor this daily RSI downtrend for a potential breakout. This downtrend has served as resistance for the RSI since November 2024. A break of the RSI downtrend could likely precede a price trend reversal to the upside.”
In a strategy session, the analyst shared with his 107,000 YouTube subscribers that the RSI has recently rebounded from the oversold level in the 20s range, which has historically signaled price reversals for Bitcoin.
“We’ve entered an overselling zone, falling below the 30 RSI, which is generally where we see sellers becoming overly enthusiastic. When sellers sell too aggressively, they start to wear themselves out. Their overselling creates an opportunity for buyers to step in and push prices up, often without requiring high volumes.
It’s already nudging prices higher quite effectively with minimal effort. This scenario unfolds when sellers are fatigued. We’ve observed these oversold conditions multiple times throughout this cycle, and each time we reached this point after a significant drop, we were either near the bottom or already at it, leading to subsequent upward price reversals.”
The analyst also notes that Bitcoin’s pullback from its all-time high is not unusual when considering historical trends.
“The current pullback of -29% is one of the more significant retraces in this cycle, but it’s not unprecedented. We witnessed a more profound pullback in the aftermath of a halving event (-32%). In fact, we have observed deeper corrections in earlier cycles as well.
Significant corrections in 2021 included: -31%, -55%, -25%.
Notable corrections in 2017 featured: -34%, -34%, -38%, -40%, -29%.”
At the time of writing, Bitcoin is trading at $83,112, remaining steady for the day.
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