- Renowned market analyst Ali Martinez shared a strategy that Bitcoin (BTC) traders can use to time the market effectively using the RSI indicator.
- When the RSI of an asset is 75, it means the asset is giving an overbought signal, while an RSI of 30 indicates oversold conditions. Whatever the indicator signals, the opposite action should be taken.
- This implies that selling becomes a natural strategy when a coin is overbought, and buying aggressively when it’s at 30 queues up buyers.
A famous analyst shared his thoughts on buying and selling Bitcoin using the Relative Strength Index (RSI).
How to Use the RSI Indicator in Bitcoin?
Renowned market analyst Ali Martinez shared a strategy that Bitcoin (BTC) traders can use to time the market effectively using the RSI indicator. In a short analysis, Ali showed that the Relative Strength Index (RSI), a proven indicator of local highs and lows on Bitcoin’s 4-hour chart over the past month, is a reliable indicator.
RSI, one of the most widely used technical indicators, displays three different data sets: 75 high, 30 low, and 50 neutral. When the RSI of an asset is 75, it means the asset is giving an overbought signal, while an RSI of 30 indicates oversold conditions. Whatever the indicator signals, the opposite action should be taken.
This implies that selling becomes a natural strategy when a coin is overbought, and buying aggressively when it’s at 30 queues up buyers. According to Ali, traders can continue their Bitcoin buying strategy when Bitcoin’s RSI exceeds 74.21. Conversely, they set the selling point when RSI falls below 30.35. According to this pattern, Ali noted that the current Bitcoin RSI is 51, indicating it’s around the neutral range.
In real trading setups, RSI is often used in conjunction with another indicator that confirms the trend being observed. One of the most preferred ones is the Bollinger Bands.
Beyond Technical Indicators, Growth
Trends within the Bitcoin ecosystem are significant determinants of overall market momentum, and the coin is currently displaying a multitude of off-chain fundamentals. While sentiment for a spot Bitcoin ETF remains high, many believe that if the U.S. Securities and Exchange Commission (SEC) approves this product, it will mark a new era for the asset’s adoption.
Calls for an upcoming Bitcoin halving are also important evidence that Ali Charts’ patience call can work in the long term. Meanwhile, Bitcoin (BTC) has been exhibiting an interesting price pattern lately and, as of the time of writing, has risen by 0.70% to $27,620.
