This bullish Bitcoin technical signal suggests that the bottom is in
Bitcoin price is currently trading at $28,000 just a week after retesting below $20,000 – potentially leaving this price range forever.
The strong rally of more than 30% in one week has brought the top cryptocurrency to a bullish technical level previously reached only after a bear market bottom was set.
Bitcoin suddenly shows strength in the midst of crisis in the banking sector
After gradually building a potential base after the FTX collapse, Bitcoin is suddenly showing serious strength compared to the rest of the financial world. It even surpasses altcoins, facing a whole new narrative: BTC versus banks. The banking sector is in crisis, but this is what Bitcoin was built for.
Since the situation began, the top cryptocurrency by market capitalization has increased by more than 30% – and it only took a week to get there. The sudden strength has caused BTCUSD to pass a crucial level on the Relative Strength Index. Breaking back above the level in the past always set the bottom in retrospect.
BTCUSD 2W RSI gives signal ending bear market
According to the chart depicted below, the BTCUSD 2-week RSI has reached a reading above 54, passing above the midpoint of the technical indicator. The Relative Strength Index is a momentum oscillator used to tell traders whether an asset is overbought or oversold. Readings above 70 indicate overbought conditions, while readings below 30 indicate that the market is oversold.
More importantly for this chart, price action passing above the midpoint of the RSI at a reading of 50 suggests that momentum is building. In Bitcoin and other cryptocurrencies, when the trend is up, the RSI can stay elevated for extended periods, or repeatedly push into overbought conditions without a major, trend-changing correction. That signal is now back, and in the next section we will examine in more detail what it means.
2W RSI is above 50, suggesting strength is increasing | BTCUSD on TradingView.com
Why an extended rally is likely above this key level
In the chart above, whenever 50 on the 2-week RSI was broken from below, it signaled the end of the bear market in crypto and an extended rally in Bitcoin.
The first signal in 2012 resulted in 18,000% ROI after the RSI crossed above 50. The second in the series in 2015 added another 6,000% to the signal’s success rate. The third one in 2019 made 600% after the signal appeared. What will it do in 2023?
#Bitcoin The 2-Week Relative Strength Index rising above 50 has usually ended the crypto winter and started a new uptrend. pic.twitter.com/MuouS9jTFH
— Tony “The Bull” (@tonythebullBTC) March 21, 2023
