A recent run-down within the Bitcoin [BTC] market faces the prospects of exhaustion prior to confirming a full-fledged bearish breakdown, so reflects a classic momentum-based oscillator.
Referred to as RSI [Relative Strength Index], the indicator measures the speed as a change of directional price movements. It operates within a group range of numbers – between 0 and 100. The close is RSI to 0, the weaker is the price momentum. Conversely, an RSI reading near 100 reflects a period of strong momentum.
The range also helps determine an asset’s purchasing and selling opportunity. Moreover, an RSI reading below 30 means the asset is oversold, thus a meaningful buy. Additionally, RSI over 70 shows an overbought asset, meaning its holders would eventually sell it to secure profits.
The RSI also permits traders to identify purchasing/selling opportunities supporting divergences between the worth & momentum. For instance, when price makes a new low but RSI makes a further low, then it’s considered a buying signal – a bullish divergence. Conversely, a Bearish RSI Divergence appears when price makes a new high but RSI makes a lower high.
So it appears, Bitcoin is confirming a bullish divergence.
Independent analyst CryptoBirb spotted the price-momentum deviation on Bitcoin’s one-day chart. In there, the pseudonymous entity outlined BTC/USD forming a sequence of lower lows around the similar period its RSI climbed while forming higher lows.
The statement appeared as the BTC/USD rate of exchange corrected lower after forming an area top at $36,675 USD on 29th June. However, as of the Friday London session, the pair was trading below $33k. The RSI fell in tandem with the newest downside move and was near 42 at the reporting time, a neutral-to-bullish space.