- A recent development has caused Bitcoin
’s (BTC) daily RSI to drop to levels not seen since the COVID-19-induced crash in March 2020.
- Market analysts and enthusiasts are now closely watching this RSI movement as it could potentially signify a turning point in Bitcoin’s price trajectory.
- Oversold RSI levels can offer insights into potential price reversals, but they are not definitive predictors. Crypto markets are known for their unpredictability.
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The Relative Strength Index in Bitcoin has declined to levels seen during COVID-19 in 2020; What will BTC do now?
RSI Indicator in Bitcoin at Bottom Levels
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In the fast-paced world of cryptocurrency trading, the Relative Strength Index (RSI) serves as a valuable tool for investors and traders to measure an asset’s momentum. A recent development has caused Bitcoin’s (BTC) daily RSI to drop to levels not seen since the COVID-19-induced crash in March 2020.
RSI, a widely used technical indicator, measures the speed and change of price movements. It oscillates between 0 and 100, with readings above 70 typically indicating overbought conditions, and readings below 30 indicating oversold conditions.
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Bitcoin’s recent drop in its daily RSI below the 20 level has caught the attention of the crypto community. This oversold level hasn’t been seen since the turbulent days of March 2020, when the market experienced the COVID-19-induced crash. During that time, the entire financial landscape was engulfed in fear and uncertainty.
Market analysts and enthusiasts are now closely watching this RSI movement as it could potentially signify a turning point in Bitcoin’s price trajectory. Historically, oversold conditions have often preceded significant price recoveries, fueling speculation of a possible bullish turnaround in the coming weeks.
However, it’s important to treat these indicators with caution. Oversold RSI levels can offer insights into potential price reversals, but they are not definitive predictors. Crypto markets are known for their unpredictability. Various macroeconomic and technological factors can influence their direction.
Bitcoin Price Analysis
As of now, Bitcoin is trading at $26,047, reflecting a 0.48% intraday decrease according to data obtained on August 21. The cryptocurrency has also experienced an 11.53% loss over the past week.
Furthermore, prominent crypto analyst Michael van de Poppe drew attention to Bitcoin dominance, indicating a potential trend that could shape the digital currency market landscape. According to Poppe’s observations, Bitcoin dominance is showing a consistent downtrend, which increases the likelihood of a notable altcoin rally.
Poppe’s analysis focuses on the technical aspect of Bitcoin dominance. He highlights that Bitcoin dominance recently tested significant 200-week moving average (MA) and exponential moving average (EMA) levels. After this test, the dominance percentage followed a downward trajectory, indicating a potential change in market dynamics.
The downward trajectory pointed out by Poppe could continue in the coming months. This trend suggests that alternative cryptocurrencies, often referred to as “altcoins,” could surpass Bitcoin in terms of price appreciation and market capitalization growth. This phenomenon could signal a broader diversification of the crypto market where investors explore promising projects beyond dominant Bitcoin.
However, Poppe’s analysis comes with an important caveat. If Bitcoin reclaims the 200-week MA and EMA, the thesis of altcoins surpassing Bitcoin could become invalid. This scenario might trigger a resurgence in Bitcoin dominance, potentially suppressing the anticipated altcoin rally.