Bitcoin price had previously been showing extreme strength leading up until the debut of the first spot ETFs. That strength has since subsided, leading to a 20% correction in BTCUSD.<\/p>\n
A popular technical indicator that measures momentum, however, could point to powerful continuation to the upside, but only if a certain level is breached. Keep reading to learn more about the Relative Strength Index and how the top cryptocurrency behaves once the market reaches an \u201coverbought\u201d level.<\/p>\n
The Relative Strength Index<\/a> is a momentum-measuring tool that signals when a market is \u201coverbought\u201d or \u201coversold\u201d. When a financial asset reaches such conditions, it often means the trend is about to change.<\/p>\n In Bitcoin and other cryptocurrencies, the weekly RSI is often a signal that the asset is moving into its most powerful phase. For example, Bitcoin made it above a reading of 70 in October 2023, and only weeks later saw an over 60% rally to local 2024 highs<\/a>.<\/p>\n Now 1W BTCUSD charts are showing an RSI reading of just below 70, pointing to a possible close back above the overbought level. If bulls can keep the top cryptocurrency by market cap above $43,650, the weekly RSI should close above the threshold.<\/p>\n\n Historical data could possibly shed some light on what might happen if the weekly Relative Strength Index<\/a> gets the close above 70 as anticipated.<\/p>\n Over the last ten years, Bitcoin saw a 1W RSI close above 70 a total of 13 times. This happened 8 times in 2016 and 2017, twice in 2019, and once each in 2020 and 2021. One additional instance occurred in 2023.<\/p>\n Of the 13 times, the average gain after the RSI closed above 70 to the peak of the movement was 107%. The largest rally was in 2020, bringing over 400% returns. The smallest rally was in 2016 and saw only a 20% gain.<\/p>\n After removing the largest and smallest outliers, the average drops down to around 61%. This could mean that Bitcoin could produce on average a move between 61 and 107%.<\/p>\n A 61% gain takes BTCUSD back to just under $68,000 and shy of a new all-time high, while a 107% move sets a new record closer to $90,000 per coin. The cryptocurrency is also potentially working on a bull flag pattern, with a target of around $77,000.<\/p>","protected":false},"excerpt":{"rendered":" <\/p>\n Bitcoin price had previously been showing extreme strength leading up until the debut of the first spot ETFs. That strength has since subsided, leading to a 20% correction in BTCUSD.<\/p>\n A popular technical indicator that measures momentum, however, could point to powerful continuation to the upside, but only if a certain level is breached. Keep reading to learn more about the Relative Strength Index and how the top cryptocurrency behaves once the market reaches an \u201coverbought\u201d level.<\/p>\n The Relative Strength Index<\/a> is a momentum-measuring tool that signals when a market is \u201coverbought\u201d or \u201coversold\u201d. When a financial asset reaches such conditions, it often means the trend is about to change.<\/p>\n In Bitcoin and other cryptocurrencies, the weekly RSI is often a signal that the asset is moving into its most powerful phase. For example, Bitcoin made it above a reading of 70 in October 2023, and only weeks later saw an over 60% rally to local 2024 highs<\/a>.<\/p>\n Now 1W BTCUSD charts are showing an RSI reading of just below 70, pointing to a possible close back above the overbought level. If bulls can keep the top cryptocurrency by market cap above $43,650, the weekly RSI should close above the threshold.<\/p>\nBTCUSD Historical 1W Relative Strength Data<\/h2>\n
Bitcoin Approaches \u201cOverbought\u201d And Why This Isn\u2019t A Bad Thing<\/h2>\n
BTCUSD Historical 1W Relative Strength Data<\/h2>\n