In my last idea I wrote how it was likely BTC is ready to once again surprise everyone and blast straight through 20k to reach even as high as 30 000. You can view that idea here:
Since that was posted BTC absolutely skyrocketed, went parabolic and is currently trading at roughly 27 500$ so it´s safe to say the trade setup played out pretty well. We are now, however, seeing more and more signs that this big rally is likely nearing a local top.
There are several things pointing in that direction but today I want to focus on one thing specifically and that is the weekly RSI.
Firstly, I want to emphasize that I think using the RSI as being "overbought/oversold" is a bunch of crap and not how you should be using this valuable indicator. With that being said, I find it it can work extremely well when it comes to RSI levels - point/value where price has historically reversed.
You can see from the chart that the weekly RSI has been this high only 4 times in the entire history of Bitcoin:
- twice the local top was made exactly at the blue line - the other two times price went even higher than the blue horizontal line but ultimately put in a major top soon after - several local tops were made when the weekly RSI reached the orange horizontal line
While it is possible BTC reaches even 30k in the next few days, overall it seems that a big correction is bound to occur soon. Should it happen, a textbook bull market correction could be anywhere between 30 - 40%.
For example, a 35% drop from here would mean a retest of former ATH at 20k and also a touch of the weekly 21EMA (orange line) that has historically been a very good buy point.
Thank you for reading!
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Incredibly enough, the weekly candle closed ABOVE the key RSI level, which has happened only TWICE in Bitcoin´s entire history.
Historically, that has meant bullish continuation of at least two more weeks so next likely target is 50k per BTC
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Well, BTC didn´t reach 50k but it did manage to go as high as 42k. However, weekly RSI now suggests local top is in and lower prices are likely