A popular cryptocurrency analyst studied technical indicators to see if Bitcoin (BTC) is headed for an exit after surviving a sudden price drop earlier in the week.
In a new YouTube video, analyst Justin Bennett examined the relative strength index (RSI) of the cryptocurrency. Bennet analyzed BTC on a daily timeframe, highlighting comparable chart movements that occurred in the summer of 2021 as well as last month.
“Now we’ve seen the RSI do something very similar lately at these prices since these highs (around $60,000 to $66,000). We have these lower highs that form a trendline. This trendline broke it here [January 2022], made a debut just like it did here, and is now pulling back. The interesting thing about it is [looking at] the level where the RSI is currently pulling back. You can see it aligns exactly with what we saw here in September. Right now the RSI is bouncing off the same level and obviously that was true when we saw Bitcoin drop and then make a big move.”
Bennett then highlights two RSI indicators from the spring and summer of 2021 and prior to January when BTC dropped to $33,000.
“I find it very interesting that the RSI has bounced off the level it was here (September October 2021) after breaking out of the downtrend, and also the RSI from these lows between May and July (2021) to this low we saw in January 2022. It’s very close to $33,000 in .
Concluding his detailed analysis, Bennett says that Bitcoin looks positive from a technical standpoint and is waiting to see if buyers are willing to enter the market.
“The basics don’t look great, but the techniques are there. So if buyers decide it’s time to raise the price, I think all the specs are there to make that happen. We have an hourly descending widening wedge that is technically in a bullish pattern. We have bullish divergence on the RSI because if we look here hourly [from Feb 17th] we can see that the RSI is starting to make higher lows while the market is making lower lows. We also have the daily RSI, which I show has jumped for my key level we saw in 2021. There are a lot of indications here that point to a potential rally in the future, but buyers need to confirm that.”
The analyst says such confirmation will come from Bitcoin price closing above the trendline of around $38,500 followed by a daily close above $39,600.
“If Bitcoin can reclaim this area, then I think we are looking for a move towards at least $46,000, if not towards the $50,000 area.”
Bitcoin’s current price was around $38,477 at the time of writing.
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