Source: Dmitry Demidko
For the past decade, cryptocurrency has been one of the hottest topics in online forums and digital spaces with Bitcoin or BTC leading the pack. Throughout its duration, the crypto market has seen some significant highs and lows, which can often be tracked on a relative strength index or RSI for investors. Recently, a key Bitcoin metric has just reached its lowest levels for the first time since the market crashed in March 2020.
On January 5, Bitcoin’s RSI (its most popular analyst) started printing out a “hidden bullish divergence” on monthly timeframes. If played out, analysts have predicted an optimistic outcome that will be pleasing for hodlers despite the RSI falling below the summer of 2021’s floor.
For some time, the community has been vocal about their frustrations with the lack of direction on BTC/USD, and it is no secret that a number of on-chain indicators have been demanding higher price levels for a while now. The current $46,000 may slide further but the classic RSI metric currently shows just how comparatively “oversold” Bitcoin is at that price.
“Bitcoin monthly RSI is currently lower than the May-July 2021 correction,” revealed Matthew Hyland, a popular analyst. He is referring to Bitcoin’s summer correction following the May miner upheaval. During that period, BTC/USD was set at $30,000 while RSI was around 60, but fast-forward to today, the BTC price is higher while the RSI is lower, standing at just 58.95. The metric was only lower in September 2020 when BTC/USD stood at around $10,000.
Along with the one-month lows, monthly RSI has been printing a pattern that has only been observed once before. “(There has) only been one other hidden monthly bull dive in Bitcoin’s history I could find,” wrote fellow trader and analyst TechDev. “Let’s see if it confirms.”
RSI is traditionally used to determine how overbought or oversold an asset is at a given price point and has served Bitcoin excellently in recent months. For example, in mid-October, TechDev noted that RSI was at 68, a level that was still far from the point at which Bitcoin hits long-term price tops.
Although Bitcoin has been the most popular cryptocurrency in the digital space, many investors believe that its time may be up as the market continues to show an off-putting inconsistency for people who have been around since the beginning and those interested to delve into it. Recently, Bitcoin has not been doing a good job in convincing everyone that the future is bright.
There are several popular traders in the community that have high price targets that they say must be broken for the market to flip bullish. Among them is Pentoshi, a trader who said that he will only reevaluate the market significantly on a macro perspective once $58,000 to $60,000 returns and holds. He argues that the structure of the market as 2022 begins is wholly unlike any other points in the period beginning in March 2020.
“Odds aren’t favorable, in my opinion,” he shared in a digest of his outlook at the start of the year. “Although I think the first quarter gives some decent exits for many.”