This is a daily analysis of Coindesk analyst and chartered market technician Omkar Godbole.
An important technical indicator warns of an early ending of Bitcoin Bull Market, even when dealers continue to place for a continued rally into the end of the year.
The considered indicator is the relative strength index (Rsi)A momentumoscillator ranging from 0 to 100. It helps dealers measure the speed and size of the recent price movements, typically calculated over a 14-day, 14-week or 14-month period.
BTC’s 14-month RSI is now flashing a bearish divergence, a pattern that arises when the indicator begins to fall as prices continue to rise. The incidence of this divergence on the monthly chart indicates that BTC’s bull market can be weakened and can potentially transition to a bearish trend.
The monthly chart shows that while BTC reached a new highlight during the July-August period and exceeded the December summit, RSI moved in the opposite direction and formed a lower high.
The Bearish divergence is added to the importance as it coincides with BTC encountering resistance by a key trendline drawn from the previous bull market tips in December 2017 and November 2021.
To cut to the hunt, bulls must keep aware of potential bearish trend turns. That said, the latest market flows suggest that dealers expect continued price gains.
“Block suggests that dealers are ready for additional gains, with remarkable activity in December BTC calls spreads ($ 125K/$ 160K). Ethereum’s focus was on tighter top side, with $ 4,800 strikes that were active in September, and front-end pressure lifting, “Jake Ostrovskis, OTC operator at Wintermute, said in an email on Thursday.
Block currents are large transactions that are privately negotiated about the counter and outside the public order book. These transactions typically involve institutions and individuals with high net value.
December -Call Sprout, mentioned by Ostrovskis, is essentially focusing on prices gathered at $ 160,000 and higher by the end of the year. Consensus is for a continued rally into the end of the year and beyond, with prices reaching up to $ 190,000. From writing, BTC changed hands near $ 110,500, representing a loss of 4.6% for the month, according to Coindesk data.
Read more: Bitcoin ‘Short Strangle’ preferred as market signals in the short term RO: 10x Research
