The recent decline of Bitcoin (Bitcoin) The market faces the prospect of exhaustion before confirming that it is fully bearish, thus reflecting the classic momentum-based oscillator.
RSI makes higher lows
This indicator is called the Relative Strength Index or RSI, which measures the speed and change of directional price changes. It operates in a range of numbers-between 0 and 100. The closing price is RSI to 0, the weaker the price momentum. On the contrary, the RSI reading close to 100 reflects a period of strong momentum.
This range also helps to identify opportunities for buying and selling assets. In detail, an RSI reading below 30 means that the asset is oversold, so it is an attractive buy. At the same time, an RSI above 70 indicates that the asset is overbought, which means that its holders will eventually sell it for profit.
RSI also enables traders to spot buying/selling opportunities based on the difference between price and momentum. For example, when the price hits a new low but the RSI hits a higher low, it is considered a buy signal—a bullish divergence. Conversely, when the price hits a new high but the RSI hits a lower high, a bearish RSI divergence occurs.
So it seems that Bitcoin is confirming a bullish divergence.
Independent market analyst CryptoBirb spot The price momentum deviation on Bitcoin’s one-day chart. There, the anonymous entity pointed out that BTC/USD formed a series of lower lows while its RSI climbed, and formed higher lows at the same time.
The statement appeared when the BTC/USD exchange rate formed a local high of 36,675 US dollars on June 29 and pulled back downward. However, as of Friday’s London trading session, the currency pair was trading at less than $33,000. RSI fell in sync with the latest downtrend and was close to 42 at press time, which is a neutral to bullish zone.
Bitcoin faces many disadvantages
Due to a series of pessimistic events, the downward sentiment in the Bitcoin market persists.This includes a global cryptocurrency crackdown Beginning with the ban in China It spread to the United Kingdom, India, South Africa and the United States in May.
For example, the Financial Conduct Authority Ban the world’s leading cryptocurrency exchange Binance conducts regulated activities in the UK. In addition, in India, the Bureau of Enforcement has issued a notice explaining the reasons to Binance’s subsidiary WazirX to promote money laundering activities.
More resistance comes from the Fed’s hawkish hints. The U.S. Central Bank’s sudden intention to control inflationary pressures and eventually raise interest rates in 2023 surprised Bitcoin investors. After the Fed’s major disclosure, Bitcoin/USD fell by more than 28%, but then recovered after finding reliable support close to $30,000.
Despite this, the bulls have been unable to sustain the rise in the price of Bitcoin above $40,000. Therefore, the cryptocurrency still stays in the range of US$30,000 to US$40,000, and there is no obvious direction deviation in the short term.
Konstantin Anissimov, executive director of CEX.IO, also pointed out that accredited investors have begun to distance themselves from Bitcoin on the environmental impact of Bitcoin.He added that once miners switch to alternatives, mainstream interest in cryptocurrencies will return Sustainable energy options.
“When environmental issues are no longer a concern, many institutional investors may trust digital currencies again and therefore buy more,” Anissimov told Cointelegraph, adding:
Bitcoin’s short-term forecast is 50,000 USD and the long-term forecast is 75,000 USD.
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