The Relative Strength Index (RSI) is an important indicator for any cryptocurrency, and Bitcoin is no different. Since the leading cryptocurrency has been around for so long, the abundance of data makes it possible to use this indicator to try to determine which direction the price might head next. This time, the indicator has turned bearish, meaning that Bitcoin’s price could head further down from here.
Analysts say the RSI is turning bearish for Bitcoin
Cryptocurrency analyst Alan Santana took to TradingView to… Involved Bearish development of Bitcoin price. The analysis, which focused on the Relative Strength Index (RSI), shows the continuation of the downtrend as the Bitcoin price is expected to fall further.
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Using Bitcoin’s weekly chart, the crypto analyst explains that the RSI is actually showing a 3-year bearish divergence. This is supported by the RSI chart showing a steady decline throughout 2024 after hitting a local peak at the start of the year.
Bitcoin’s RSI has fallen by about 42% since the beginning of the year, moving from a high of 88 to 50.6 at the time of analysis. However, Alan Santana uses a longer time frame of 2021 to 2024, which shows a bearish divergence in this indicator.
This bearish divergence has been evident as the RSI has made a lower high in 2024 compared to the 95 peak in 2021. According to the analyst, this means that the RSI is now turning bearish for the first time since August 2023. This makes it the most bearish Bitcoin has ever been in a year.
What level will the price of BTC drop to?
At the time of this analysis, Bitcoin had already seen a sharp drop from $70,000 to below $60,000 before making a slight recovery at the time of writing. However, the crypto analyst doesn’t believe this is the end and warns investors to expect further declines.
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According to the chart, Alan Santana expects Bitcoin to drop by more than 20% from here again. This would mean a drop below $50,000. The crypto analyst puts the lower limit for this drop at around $44,000.
If these predictions come true, it would mean that the price would return to the $40,000 level for the first time since January 2024. However, it is not all bad news, as the cryptocurrency analyst explains that “this, and other signals, tell us that there is room for lower prices; much lower, before we see new highs and booming growth.”
Featured image created using Dall.E, chart from Tradingview.com
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