One of the simplest price action indicators – Relative Strength Index or RSI – can securely predict bull run tops, analyst states
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” that work for 10 years
Today, the analyst has taken to Twitter to share his thoughts about the role of the Relative Strength Index (RSI) in predicting Bitcoin (BTC) price peaks and bottoms.
Two simple lines are all you’ve needed to call every market top and bottom in #Bitcoin’s 10+ year history.
I’ll do everything I can to help us nail the next pair close as we can.
And we’ve got a hell of a community to help. pic.twitter.com/xTzCJ1rRiZ
— TechDev (@TechDev_52) November 6, 2021
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, the touching of the lowest border 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: Rollercoasters of “Schocktober”
As such, according to this model, the Bitcoin (BTC) price is looking for its peak in $140,000-$160,000 waters in early Q1, 2022. By press time, the RSI line sits below 70, inching closer to the “moderately overbought” zone.
Invented in 1978, RSI is a momentum indicator that measures the magnitude of price changes in terms of “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 spiked from 24 to 84 (“Extreme Greed”) and printed a seven-month high.