Bitcoin Price RSI Breakout Could Target $9K Short-Term

Tony "The Bull" Severino

5 years ago

3 mins read

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Bitcoin price has been trapped within a powerful downtrend that’s cut the leading cryptocurrency by market cap’s value by nearly 50% over the course of the last few months.

Coinciding with the downtrend, Bitcoin’s Relative Strength Index has been confined below a decreasing trendline that the cryptocurrency has now broken out of, suggesting that a rally could unfold in the days ahead. And according to one crypto trader, if Bitcoin can break out of the current trading range, a retest of $9,000 may be possible.

Bitcoin Price Breaks Out On Relative Strength Index, Targeting $9K

2019 may be in the history books, but the effects of the year’s parabolic rally in Bitcoin will be felt for more time to come, as the price of the first-ever cryptocurrency has yet to break out from its recent downtrend.

However, according to an important trend-measuring indicator called the Relative Strength Index, Bitcoin price may be ready to do just that.

On the RSI chart, Bitcoin can be seen making three consecutive highs into overbought territory between April and June 2019. After the third peak, the downtrend began, and is reflected clearly on the RSI. Each rise in price was stopped the moment it reached RSI resistance.

But not this time. After the latest pump above $7,500, Bitcoin price has broken out of the downtrend resistance on the RSI indicator and has room overhead to rally before it runs into overbought conditions. According to one crypto analyst, previous highs around $9,000 are the most likely short-term target for the crypto market.

If #Bitcoin breaks $7,500 say hello to $9,000.

Read the full analysis and strategy here: https://t.co/D236DdMrUl pic.twitter.com/7VEySrmGL7

— Crypto Rand (@crypto_rand) January 6, 2020

A Quick and Dirty Primer On The Relative Strength Index

The Relative Strength Index is among the more commonly used and reliable indicators in technical analysis.

The tool comprises of a line chart with readings from 0 to 100. 50 would be considered neutral and any rises above 70 or drops below 30 are considered overbought and oversold, respectively.

The indicator is designed to measure the strength of a trend, and give early signals as to when those trends may be running out of stream and ready to reverse.

In addition to watching for deviations into either overbought or oversold zones, traders can use the tool to spot divergences. When Bitcoin price rises or falls, so does the RSI. However, if an indicator fails to move with the same strength as the asset’s price, it could signal that the underlying trend is close to failure.

Ahead of this recent breakout, Bitcoin price was also exhibiting a bullish divergence on the RSI, which could explain the reversal that may be underway.

Featured image from Shutterstock

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.