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At press time, Bitcoin is holding firm. According to CoinMarketCap data, the world’s most valuable coin is trading above $63,500, maintaining stability over the last day and showing a respectable 7% increase over the past week of trading. Technically, the uptrend remains intact as long as prices stay above the support zone around $58,000 and $60,000.
Bitcoin Up 30% From August Lows, RSI Dips Below 80% Level In The Monthly Chart
Currently, traders are optimistic, which could set the stage for another upward movement. Since the dip in early August, Bitcoin has risen by 30%, retesting August highs around $65,000. There are high expectations that buyers will push prices above this level, marking another phase for confident bulls. This development in the monthly chart is particularly noteworthy.
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According to an analyst on X, as bulls struggle to break above $65,000 and establish a fresh 2-month high, the upside momentum appears to be waning. The Relative Strength Index (RSI) in the monthly chart is falling and has recently dipped below the 80% mark. This zone between 80% and 100% typically indicates an overvalued or overbought condition. With the RSI falling, it suggests that the upside momentum may be diminishing, which is a net negative for bulls.
This observation in the monthly chart could have serious implications for daily and lower time frames. It hints that cracks may be forming, and sellers could be preparing to push prices lower, especially if bulls fail to break above $65,000.
There Is Hope, BTC Will Likely Spike Once Prices Race Above $73,000
Despite the bearish outlook, there is hope. The analyst notes that although the RSI is below the 80% mark, this is not unprecedented. On several occasions, Bitcoin prices have recovered steadily when the RSI falls to this level. However, it is essential to note that this recovery does not happen every time.
Given this concern, traders should closely monitor price action in the coming days. A drop toward the $60,000 mark could dampen the current momentum, signaling the start of a potential correction. Even with this cautious outlook, the analyst remains bullish.
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In a separate post, the analyst mentioned that if Bitcoin overcomes its current weakness and climbs toward $73,000, the coin could rally strongly. When this happens, a new influx of fresh liquidity, especially in the futures market, is expected. This inflow could drive prices to new heights, possibly even above all-time highs. However, for this surge to occur, BTC needs to gather momentum and achieve a decisive close above the $65,000 resistance line.
Feature image from DALLE, chart from TradingView
