One of the simplest price action indicators – the relative strength index or RSI – can safely predict bullish highs, analysts say
An anonymous trader and analyst who goes by @TechDev_52 alias on Twitter is sure that only one indicator can securely predict where the Bitcoin (BTC) price will find its macro-cycle peaks and bottoms.
“Two simple lines” which have been in operation for 10 years
Today, the analyst took to Twitter to share his thoughts on the role of the Relative Strength Index (RSI) in predicting peaks and troughs in Bitcoin (BTC) prices.
On his chart, the price dynamics of the flagship cryptocurrency are displayed on a logarithmic scale using a 14-day timeframe. The two descending lines are added to the RSI chart; one in the “overbought zone”, one in the “oversold zone”.
According to the views of the analyst, when the RSI line touches the upper border of the “channel,” the Bitcoin (BTC) price peaks. Otherwise, touching the lower edge means the bottom of this or that cycle.
At the same time, on this chart, the Bitcoin (BTC) price does not peak after the bottom: i.e., in 2011, 2012 and 2014, we saw two consecutive peaks.
From “Extreme Fear” to “Extreme Greed” in Three Weeks: The Roller Coaster of “Schocktober”
As such, according to this model, the price of Bitcoin (BTC) seeks its peak in the waters of $ 140,000 to $ 160,000 at the start of the first quarter of 2022. By press time, the RSI line sits below 70, inching closer to the “moderately overbought” zone.
Invented in 1978, the RSI is a momentum indicator that measures the magnitude of price changes in terms of the “power” displayed by bulls or bears.
Last October witnessed one of the most impressive changes of Bitcoin (BTC) sentiment. In three weeks, the Crypto Fear and Greed Index rose from 24 to 84 (“Extreme Greed”) and posted a seven-month high.
