Crypto traders who have seen bitcoin the largest cryptocurrency, jumping overnight to $64,000 from recent lows below $60,000, may be wondering if the bottom has been hit and a fresh bull run has started.
There is a single signal to get that confirmation. Right now it says the recovery has not started.
This signal comes from the widely followed momentum gauge called the relative strength index, or RSI. The measurement can range from 0 to 100. Readings above 70 indicate that an asset is getting hot and potentially overbought, while readings below 30 indicate the opposite. Between these extremes, specific levels often arise as dividing lines between bullish and bearish environments.
For the bitcoin price, the line is at 41.5, according to crypto data analysis platform Material Indicators. Above that level, BTC has historically had a stronger case for being in a bullish macro trend. Below it, the bearish pressure tends to dominate.
“Right now, Bitcoin is below that and still going down,” Keith Alan, an analyst at Material Indicators, said in an email. “That doesn’t mean the price will collapse, but it does mean the burden of proof is still on the bulls.”
