Bitcoin Bullish Momentum Reignites: RSI Signals Potential Surge To $65,000
October 25 2023 - 10:00PM
NEWSBTC
After experiencing a brief correction from its new yearly high of
$35,300, Bitcoin (BTC), the leading cryptocurrency in the market,
is showing signs of renewed bullish momentum. As the digital
asset approaches the $35,000 mark again, a key indicator is
following patterns observed in 2020, suggesting a potential surge
that could propel Bitcoin to reclaim its previous peak of
$65,000. Scott Melker, a prominent crypto investor and host
of the ‘Wolf of All Streets’ podcast, notes the significance of
Bitcoin’s overbought Relative Strength Index (RSI) on both lower
time frames and the weekly chart, hinting at a promising trajectory
for the cryptocurrency’s price. BTC’s 2020 RSI Flashback Bitcoin’s
RSI, a widely used technical indicator that measures the strength
and speed of price movements, is currently flashing signs of
extreme overbought conditions on various lower time frames.
Notably, the daily RSI stands at 88, indicating a potential need
for a healthy retracement. However, the weekly RSI garners
attention as it has just entered the overbought zone, a range
historically associated with substantial upward movements in a true
bull market. Related Reading: Bitcoin ETF Will Send BTC Back To
$44,000, Why This Trading Firm Is Betting On This Scenario To gain
insights into Bitcoin’s potential future trajectory, it is worth
revisiting the patterns observed in 2020. According to
Melker, during that year, Bitcoin’s RSI went overbought on the
weekly chart when the cryptocurrency was trading around $12,000, as
indicated by a small blue circle on the bottom left of the chart
above. Subsequently, Bitcoin embarked on an unprecedented
rally, surging to $65,000. This historical precedent highlights the
possibility of a similar price action if true bullish catalysts
emerge. With Bitcoin’s weekly RSI entering the overbought territory
once again, there is a growing sentiment among market observers
that the cryptocurrency has ample room to run. Scott Melker
emphasizes that if significant bullish catalysts materialize,
Bitcoin’s potential for further upside becomes virtually limitless.
The current RSI readings hint at the potential for an extended
price rally, potentially enabling Bitcoin to surpass its current
highs and reach the coveted $65,000 level. Bitcoin Market Dynamics
Shift As Key Indicators Surge Adding to Melker’s bullish outlook
for BTC, crypto analyst Miles Deutscher has stated on X (formerly
Twitter) that the Bitcoin market landscape has witnessed a notable
shift in recent days, leading to a significant uptick in bullish
sentiment. In particular, volume and open interest in
Bitcoin-related futures and options on the Chicago Mercantile
Exchange (CME) have risen to multi-month and multi-year highs,
indicating growing interest and participation from institutional
investors. Moreover, call options open interest has surpassed the
peak levels seen during the 2021 bull run. In tandem with these
developments, average crypto-related stocks have experienced a
substantial uptick, and public funds have seen a massive influx of
$43 million into Bitcoin, equivalent to 10% of the year-to-date
inflows, all within a single day. Related Reading: Shiba Inu Burn
Rate Falls 80%, Is It Time To Sell? These metrics reflect increased
trading activity and liquidity in the Bitcoin derivatives market,
indicating heightened institutional interest. Such a surge in
trading volume often precedes significant price movements, leading
some analysts to anticipate a potential bullish breakout shortly.
Another encouraging sign for Bitcoin’s prospects lies in the call
options open interest, which has recently surpassed $10 billion. To
put this into context, during the peak of the 2021 bull run, call
options open interest reached $9.9 billion. This milestone
suggests that market participants are increasingly positioning
themselves for a potential rise in Bitcoin’s price. The growing
number of call options indicates a bullish sentiment among traders,
further fueling expectations of a potential price surge. As of the
time of writing, Bitcoin is trading at $34,500, successfully
reclaiming the level it briefly lost during a recent correction on
Tuesday. Over the past 24 hours, Bitcoin has maintained gains of
1.4%. Featured image from Shutterstock, chart from
TradingView.com
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