Technical Analyst Says that RSI of Bitcoin Shows that Bitcoin Hasn’t Oversold in Four Years
The Relative Strength Index (RSI) is a measurement of the impact that recent price changes have had, ranked on a scale of 0 to 100, which is applied to Bitcoin. When the reading is below 30, Bitcoin is considered to be undersold, while reading over 70 is considered to be overbought. A technical analyst at Fundstrat Global Advisors, Rob Sluymer, pointed out that this is the lowest level that the RSI has seen in four years.
Specifically, in a research note to clients of the company, Sluymer said,
“BTC is again at historically oversold levels and is retesting important support that needs to hold to suggest a bottom is developing.”
In 2015, Bitcoin was considered oversold, taking up most of the year to move back up.
With the recent lows in December, there is a chance of another 20% decline. As reported by MarketWatch, Sluymer explained,
“A break below the Q4 lows at BTC 3100 would imply a decline to 2270 while a move above BTC 4200 is needed to signal BTC is beginning to improve.”
It is important to note that Bitcoin hasn’t closed higher than $4200 since the end of November last year.
Still, there are some people who are optimistic about the crypto winter coming to a close. The average prediction amongst industry participants is that Bitcoin will end 2019 at $6549, based on a recent Finder.com survey.
Blockchain consultant Joe Raczynski from Washington, D.C., said, “As it stays here, its stability will at some point foster positive gains as development continues.” The consultant has expressed that his Bitcoin target for the year is $8000, stating that Bitcoin would earn more investors if the global market were to show instability.
Anyone watching the charts are more realistic or even pessimistic about where Bitcoin is going, considering that January was the 7th month in a row that Bitcoin showed decline value. Sluymer said,
“A successful retest of the Q4 lows developing into a double bottom price pattern remains a possibility, but the price structure for most cryptocurrencies remains weak and appears vulnerable to a pending breakdown to lower lows.”