The last time this classic indicator dropped below the 20.0 level was in March 2020, when the world panicked due to the spread of the coronavirus.
→ SpaceX’s decision to sell bitcoins from its balance sheet;
→ high yields of US government bonds (10-year bonds are at a 14-year high);
→ the collapse of the Chinese developer Evergrande.
Be that as it may, the decline of RSI below the level of 20.0 should not be interpreted as a signal to open a long position, although there is evidence for this.
Bullish arguments:
→ a long lower shadow on yesterday’s candle on the daily bitcoin price chart confirms the aggressiveness of the bulls defending the 25.6k level;
→ this level approximately coincides with the Fibo level at 0.38 for a rollback from the growth of A→B;
→ the bitcoin market may follow the stock market — after all, the S&P 500 is at the lower boundary of the rising channel, which operates in 2023.
Bearish arguments:
→ The price of bitcoin has broken through the upward channel of 2023, which may mean a radical change in sentiment. The USD 30,000 level proved to be a difficult barrier for the bulls.
→ Intraday charts show that bitcoin fell especially rapidly in the 26,800-27,500 range. Therefore, this area of seller dominance could become resistance to a recovery if it follows the RSI’s spring 2020 lows.
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