Bitcoin’s recent decline (BTCThe market is facing potential exhaustion before a complete bearish breakdown is confirmed, so it reflects a classic momentum-based oscillator.
RSI is making higher lows
The indicator, called the Relative Strength Index or RSI, measures the speed as well as the change of directional price movements. It works within a specific range of numbers – between 0 and 100. The close is the RSI to 0, and the weaker is the price momentum. Conversely, the RSI reading near 100 periods reflects strong momentum.
The range also helps identify the opportunity to buy and sell assets. In detail, an RSI reading of less than 30 means that the asset is oversold, hence an attractive buy. Meanwhile, the RSI above 70 shows an overbought asset, which means that its holders will eventually sell it to lock in profits.
The RSI also allows traders to identify buying/selling opportunities based on the differences between price and momentum. For example, when the price makes a new low but the RSI makes a higher low, it is considered a buy signal – a bullish divergence. Conversely, bearish RSI divergence appears when price makes a new high but the RSI makes a lower high.
So it appears that Bitcoin is confirming an upward divergence.
CryptoBirb Independent Market Analyst Foreman Price momentum divergence on Bitcoin intraday chart. There, the pseudonymous entity notes that BTC/USD is forming a series of lower lows around the same period that the RSI has risen while making higher lows.
The statement emerged when the BTC/USD exchange rate corrected lower after forming a local top at $36,675 on June 29. However, as of Friday’s session in London, the pair was trading under $33,000. The RSI is down along with the recent bearish move and is near 42 at the time of writing, a neutral to bullish area.
Several Headwinds for Bitcoin
The negative sentiment in the bitcoin market continued due to a flurry of pessimistic events. This included a global crackdown on cryptocurrencies Started with a ban in China In May, it spread to the United Kingdom, India, South Africa and the United States.
For example, the Financial Conduct Authority The world’s leading cryptocurrency exchange banned Additionally, in India, the Enforcement Directorate has issued a Notice of Cause to Binance’s subsidiary exchange, WazirX, to facilitate money laundering.
More headwinds emerged from hawkish hints from the Federal Reserve. The US central bank surprised Bitcoin investors with its sudden intention to control inflationary pressures with eventually raising interest rates in 2023. BTC/USD fell more than 28% after the Fed’s big disclosure but later recovered after finding reliable support near $30,000.
However, the bulls continued to fail to sustain the bullish Bitcoin price trends above the $40,000 level. As a result, the cryptocurrency is still stuck within the $30K-$40K range, which shows that there is no clear directional bias in the short term.
Konstantin Anisimov, CEO at CEX.IO, also noted that accredited investors are beginning to keep their distance from Bitcoin regarding its environmental impact. He added that the prevailing interest in cryptocurrency will return once miners switch to the alternative sustainable energy options.
“When environmental concerns are not a concern, many institutional investors are more likely to trust the digital currency again, and thus buy more,” Anisimov told Cointelegraph, adding:
Bitcoin has a near-term forecast of $50,000 and a long-term forecast of $75,000.
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