How Weekly RSI Could Suggest The Bitcoin Bottom Is In

Tony "The Bull" Severino

Last Updated: June 11, 2024 1:45 pm

3 mins read

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Bitcoin price is currently trading at around $23,500 at the time of this writing, up over 30% from lows and 10% for the week. The recovery has brought the weekly RSI out of oversold territory after reaching historical levels.

Here is why the setup could be the buy signal bulls have been waiting for, and how the Relative Strength Index currently resembles the last bear market bottom.

Weekly Bitcoin RSI Recovers From Historical Oversold Conditions

In technical analysis, sometimes less is more. Traders commonly fill a chart with lines or indicators, desperately seeking an edge in the market. When in reality, that edge is patience and watching for the right signals to buy and sell Bitcoin.

According to the weekly Relative Strength Index, the time to buy BTC could be near. Comparisons with past bear markets suggest the signal could put in a long-term bottom.

Bitcoin weekly RSI has recovered from oversold conditions | Source: BTCUSD on TradingView.com

The weekly RSI has risen up out of oversold conditions to above a reading of 30. This alone is enough for technical analysts to begin watching for follow-through.

A buy signal on the RSI is generated after the indicator reclaims the lower threshold at 30, retraces, holds, then pushes past the first high. The signal is clear during the 2018 bear market bottom and told the masses it was time to buy BTC.

An example of an RSI buy signal at the 2018 bear market bottom | Source: BTCUSD on TradingView.com

Why The Bear Market Bottom Could Already Be Behind Us

The Relative Strength Index on TradingView includes a moving average set at default to a length of 14. Bitcoin price action reclaiming the moving average after recovering from oversold conditions has in the past put in a significant long term bottom.

The weekly RSI reached the most oversold conditions ever | Source: BTCUSD on TradingView.com

The chart above also demonstrates that the recent low on the weekly RSI was the most oversold the top cryptocurrency has ever reached historically.

In the past, Bitcoin has always recovered to new record highs. However, speculative assets can remain overbought or oversold for longer than expected. What happens next in the case of this most recent record low on the RSI? Was this the bottom in crypto?

Weekly #Bitcoin RSI analysis could suggest a bottom is in. What do you think? pic.twitter.com/JSdUlbCo3j

— Tony “The Bull” Spilotro (@tonyspilotroBTC) July 19, 2022

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

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.

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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.

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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.

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