Throughout the past, the RSI level of 40 has been a strong resistance/support.
Every time the RSI either strongly broke through 40 (see April 10th this year for bullish example) or went through 40 and then turned from support to resistance or vica versa (see December 16th for a bullish example), the price reacted strongly.
The 10th of July, the price broke down through 40 again, continuing the bearish trend towards the strong daily support of 0.00155.
If the support holds while the RSI breaks upwards, through 40, and either turns the RSI 40 into a support or makes a big move upwards, a price increase is likely.
-----------------------------------------
Any comments are welcome, I'm relatively new to this!
Every time the RSI either strongly broke through 40 (see April 10th this year for bullish example) or went through 40 and then turned from support to resistance or vica versa (see December 16th for a bullish example), the price reacted strongly.
The 10th of July, the price broke down through 40 again, continuing the bearish trend towards the strong daily support of 0.00155.
If the support holds while the RSI breaks upwards, through 40, and either turns the RSI 40 into a support or makes a big move upwards, a price increase is likely.
-----------------------------------------
Any comments are welcome, I'm relatively new to this!
Comment:
In the first blue box above, the (weak) break of RSI-40 as support gives little to no reaction.
In the second blue box, the (stronger) break of RSI-40 as support gives a huge bearish reaction that is sustained as long as the RSI-40 does not fail as resistance.
In the second blue box, the (stronger) break of RSI-40 as support gives a huge bearish reaction that is sustained as long as the RSI-40 does not fail as resistance.
Comment:
Continuing on:
Let's also take a look at RSI-60:
60 seems to be another key level on the daily chart, where breaking it as a support/resistance results in a strong reaction.
The strongest indicator seems to be double breaks: first up through 40, then up through 60 for a strong bullish signal, or down through 60, then down through 40 for a strong bearish signal.
This hypothesis seems to hold through for all but one case (the 10.8% drop), where the reaction was not as strong as in the other cases (49% drop, 218% rise, 46% drop, 50% rise).
Let's also take a look at RSI-60:
60 seems to be another key level on the daily chart, where breaking it as a support/resistance results in a strong reaction.
The strongest indicator seems to be double breaks: first up through 40, then up through 60 for a strong bullish signal, or down through 60, then down through 40 for a strong bearish signal.
This hypothesis seems to hold through for all but one case (the 10.8% drop), where the reaction was not as strong as in the other cases (49% drop, 218% rise, 46% drop, 50% rise).
It seems the theory that RSI 40 is a key level for GAS/BTC is acceptable for the 4h time frame as well.
However, it does seem that the price reaction is less predictable when the RSI is caught between 40-50, as can be seen in this image: