Since the collapse of crypto markets, Bitcoin prices are making a comeback. An apparent bullish divergence may indicate that bulls are lying to the waiting crowd and will soon charge.
We will now take a close look at this potential continuation signal for bullishness on the weekly BTCUSD price charts.
Crypto Bulls are lying in wait, soon could be ready to charge
Bitcoin, which reached almost $20,000 per coin in 2017, became an international phenomenon and launched a bull market that has lasted nearly a century. The market was expected to see significant appreciation after the long bear markets.
In the stock-to-flow theory, it was predicted that Bitcoin’s top cryptocurrency would be well above $100,000 by now. However, the prices have retraced their steps back to 2017, as they did in 2017. Many altcoins returned to 2013 levels.
How Weekly RSI Could Suggest The Bitcoin Bottom Is In| How Weekly RSI Could Suggest The Bitcoin Bottom Is In
While the Bitcoin price dropped more than 74% due to the sale, the patient bulls could have been resting and planning for their next move. From the Black Thursday low, which brought the top cryptocurrency to below $4,000/coin, a hidden bullish divergence has been formed on the BTCUSD weekly RSI.
This plunge was then used as a spring, resulting in the 2020 bull market and new record highs through 2021. Bitcoin is it ready to resume where it was left off with a continuation signal from the weekly RSI?
Weekly RSI reached its highest level ever. Source: TradingView.com.| Source: BTCUSD on TradingView.com
Does This Bitcoin RSI Hidden Bullish Divergence Signal “Continuation?”
A potential bullish divergence is evident in the weekly Relative Strength Index. It is evident that an indicator can make a lower low while price action achieves a higher low in the above example. This type of behavior is typically indicative of continuation in the primary trend – which for Bitcoin has almost always been up.
The same weekly RSI has also reached the most oversold conditions in the cryptocurrency’s short price history. Bulls are even happier as the RSI rose above 30 and out of oversold territory. In the chart, you can see that the RSI could surpass the RSI moving average.
Bitcoin Weekly RSI Sets Record For Most Oversold In History, What Comes Next?| Bitcoin Weekly RSI Sets Record For Most Oversold In History, What Comes Next?
The $29,000 mark is the starting point to recover Bitcoin’s bull run. BTCUSD could reenter its multi-year trading zone, allowing bulls to take aim at the opposite side of the range close to 2021 all time highs.
But it all depends on this bullish divergence confirming, which is only something we’ll truly know in hindsight.
Weekly #BitcoinOne indicator that a bottom may be in is RSI analysis. How do you feel? pic.twitter.com/JSdUlbCo3j
— Tony “The Bull” Spilotro (@tonyspilotroBTC) July 19, 2022
Follow @TonySpilotroBTC on Twitter or join Telegram from TonyTradesBTCGet daily market insight and expert technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image taken from iStockPhoto. Charts from TradingView.com
