It has been just revealed that Bitcoin has flashed an important signal. Check out the latest reports about this below.
Bitcoin flashes bullish signal
According to a well-known cryptocurrency strategist, Bitcoin (BTC) is exhibiting a bullish trend that has previously been a precursor to a significant price increase.
Pseudonymous analyst Cheds has informed his 314,800 followers on the social media platform X that the relative strength index (RSI) indicator on Bitcoin’s weekly chart has now entered into the “overbought” territory.
The RSI is a momentum indicator that traders use to identify trend continuation or reversal. Cheds suggests that when Bitcoin presented the same signal in October 2020, it skyrocketed and achieved gains of more than 5x.
“Observation:
BTC weekly RSI entering power zone (70+, also known as overbought).
Overbought = bullish.
The last time this happened the price ran from $12,000 to $64,000.
Though the price context is different, it is worth observing.”
According to traditional investment wisdom, when an asset is overbought, it means it is trading well above its fair value and investors believe that a correction may be imminent.
However, Cheds, a cryptocurrency analyst, suggests that this is not the case for Bitcoin.
He argues that when Bitcoin is overbought, it actually indicates a bullish trend and the potential for continued price gains. In fact, historically, most of the biggest price gains for Bitcoin have occurred while it was overbought.
At the moment of writing this article, Bitcoin is trading at $37,002.
When it comes to Ethereum (ETH), a smart contract platform and the second-largest cryptocurrency by market capitalization, Cheds believes that if it moves above a key price level, bulls will likely start to flex their muscles.
“ETH sideliners can use a break and hold of $2,150 area as a long thesis.”
There have been lots of optimistic crypto predictions these days and most of them involve BTC ahead of the SEC approval for a BTC ETF.
