Tag: xbt

Why “Overbought” Bitcoin Could Trigger A 107% Rally
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Bitcoin price had previously been showing extreme strength leading up until the debut of the first spot ETFs. That strength has since subsided, leading to a 20% correction in BTCUSD.

A popular technical indicator that measures momentum, however, could point to powerful continuation to the upside, but only if a certain level is breached. Keep reading to learn more about the Relative Strength Index and how the top cryptocurrency behaves once the market reaches an “overbought” level.

Bitcoin Approaches “Overbought” And Why This Isn’t A Bad Thing

The Relative Strength Index is a momentum-measuring tool that signals when a market is “overbought” or “oversold”. When a financial asset reaches such conditions, it often means the trend is about to change.

In Bitcoin and other cryptocurrencies, the weekly RSI is often a signal that the asset is moving into its most powerful phase. For example, Bitcoin made it above a reading of 70 in October 2023, and only weeks later saw an over 60% rally to local 2024 highs.

Now 1W BTCUSD charts are showing an RSI reading of just below 70, pointing to a possible close back above the overbought level. If bulls can keep the top cryptocurrency by market cap above $43,650, the weekly RSI should close above the threshold.
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The average move is 107% | BTCUSD on TradingView.com
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BTCUSD Historical 1W Relative Strength Data

Historical data could possibly shed some light on what might happen if the weekly Relative Strength Index gets the close above 70 as anticipated.

Over the last ten years, Bitcoin saw a 1W RSI close above 70 a total of 13 times. This happened 8 times in 2016 and 2017, twice in 2019, and once each in 2020 and 2021. One additional instance occurred in 2023.

Of the 13 times, the average gain after the RSI closed above 70 to the peak of the movement was 107%. The largest rally was in 2020, bringing over 400% returns. The smallest rally was in 2016 and saw only a 20% gain.

After removing the largest and smallest outliers, the average drops down to around 61%. This could mean that Bitcoin could produce on average a move between 61 and 107%.

A 61% gain takes BTCUSD back to just under $68,000 and shy of a new all-time high, while a 107% move sets a new record closer to $90,000 per coin. The cryptocurrency is also potentially working on a bull flag pattern, with a target of around $77,000.
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The 75% target is within historical averages | BTCUSD on TradingView.com
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Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
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Tony "The Bull" Severino

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January 31, 2024
Failed Bearish Signal Could Send Bitcoin To $85K Next Month
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Bitcoin recently gave a bearish signal, which ultimately failed to produce a meaningful pullback.

Due to the technical failure, historical data suggests that in only a matter of a month BTCUSD could set a new all-time high and reach a target of $85K per coin. Here’s why.

Why Failed Bearish Technicals Produce Bullish Breakouts

In technical analysis, certain patterns are considered characteristically bearish or bullish. For example, the ascending triangle is a typically bullish-leaning pattern, but only breaks upward 63% of the time. The other 37%, the pattern breaks down bearish.

Because of the nature of how orders and stop losses are stacked on either side of a pattern’s trend lines, a failed bullish pattern can be extremely bearish and vice-versa. Dissecting further, since the pattern was visibly bullish, it could have attracted more long-side positioning that is forced to unwind lower.

Recently, Bitcoin price gave a bearish TD9 sell setup on the weekly TD Sequential. However, no major correction followed. When this occurs, it often results in a sizable move in the opposite direction of the signal.

More simply put, the failed TD9 sell setup could mean a massive move higher. And how high price could go and how fast might shock you.
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Could BTC reach $85K in four weeks? | BTCUSD on TradingView.com
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Market Timing Tool Hints At Bitcoin Rally To $85K

The TD Sequential is a market timing indicator developed by Thomas Demark. A TD9 setup or TD13 countdown is a specific sequence of candles that signal trend exhaustion.

Back in 2020 when this same signal failed, Bitcoin blasted off to new all-time highs above $20,000 and then some. It rallied 143% in the four weeks following the signal and over 300% more in total when it was all said and done.

If the same magnitude move followed this recently failed TD9 sell setup, Bitcoin price would reach $85,000 by the end of December. Another 300% beyond the current all-time high in BTCUSD would take the top cryptocurrency to over $200,000 per coin in total.

In terms of lower prices, the indicator also provides TDST support and resistance levels. These levels rise and fall with each completed TD setup. This latest setup caused TDST floor price support to raise from $10,000 to $25,000, reducing the chances that BTCUSD ever trades below that price again.

In December 2020, after a failed TD9 sell setup, #Bitcoin did another 143% in 4 weekly candles, pushing above former ATH resistance

The same magnitude move would bring $BTC to another new ATH at $85,000 before the end of the year

Still doubt my thesis we’ll see ATHs in 2023? pic.twitter.com/GwCXEaY1II

— Tony “The Bull” (@tonythebullBTC) November 17, 2023
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Tony "The Bull" Severino

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November 18, 2023
Bitcoin Bulls Are Back! Latest Signal Confirms Bullish Trend is Brewing
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Those burned by the last big Bitcoin bull run are rightfully skeptical that another one is here so soon. However, a trend strength indicator is now confirming the existence of a new bullish trend emerging.

Are bulls finally back in control over crypto? Sidelined investors and traders will want to pay attention.

How Technicals Could Confirm A New Bullish Trend In Bitcoin

Bitcoin price is pulling back after a few failed attempts to make it though $38,000 resistance. This sudden weakness after a major breakout is both reassuring for bears and confusing for bulls. Those on the sidelines still aren’t certain what to do.

But that’s what technical indicators were designed for – to eliminate noise and emotions, allowing the tools to make the decisions for you.

According to a trend strength measuring tool called the Average Directional Index, the bullish Bitcoin trend just became official as the indicator reaches above a reading of 20. The last time that BTCUSD reached above 20 while bulls were in control was back in August 2020, prior to a 450%+ rally.

For comparison sake, another 450% rally would put the price per coin around $200,000. However, each individual trend behaves differently and tops out at different ADX reading. This means anything is possible, but for now, the rise above 20 on the ADX is notable.
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The trend is confirmed by a reading above 20 | BTCUSD on TradingView.com
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How To Tell Bulls Are In Control Of Crypto With The ADX

The Average Directional Index, as mentioned, is a trend strength measuring tool. It was created by J. Welles Wilder, Jr., known as the father of several technical analysis indicators. Wilder also developed the Relative Strength Index, Average True Range, and Parabolic SAR.

The ADX confirms a trend is active above a reading of 20, while anything below 20 suggests a weak trend and potential sideways price action. The tool often includes two additional indicators, the DI+ and DI-, which show which side of the market is in control of price action.

If the DI+ is above the DI- bulls are in control. Bears are in control if DI- is above DI+. The premise is simple and provides an easy way to visually see which side of the market is dominating.

Not only are bulls in control, but the DI+ is at 36, while the highest reading back in August 2020 was 32. This means that bulls are stronger now than they were back then, and look what happened.

The above chart was originally featured in Issue #27 of CoinChartist VIP: The Ethereum Issue. Check out the latest issue for free.
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Tony "The Bull" Severino

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November 16, 2023
Why Bitcoin Price Could Double To $60K In A Flash
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Bitcoin price action has been known to go “parabolic” when speculation in the crypto market is in full gear. Prices begin to rise rapidly with very few pullbacks in between.

According to evidence, a parabolic structure is possibly building that could cause BTCUSD to “double” in a short amount of time. And with the first ever digital asset now above $30K per coin, it means a potential monstrous move to $60K could be on the horizon.

Why BTC Could Teleport To $60K

In technical analysis, an asset is said to have gone “parabolic” when an increasingly steep upward curve supports a series of higher highs and higher lows.

Parabola typically forms in a sideways, horizontal range. After each higher low, price accelerates further, causing the angle of the slope to nearly go vertical.

Bitcoin has done this several times throughout its short history. And after the longest bear market on record, the cryptocurrency could be ready for another parabolic rally.
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Has Bitcoin built another parabolic base? | BTCUSD on TradingView.com
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Bases Loaded, Bitcoin Number Up

A comparison with the iconic parabolic curve example, possibly puts Bitcoin price at what would be the third touch and third base of a four-base pattern. A rounded parabolic curve is supporting a series of high timeframe higher lows.

Base three is significant because it is said to produce a move where the asset “doubles in the shortest period of time.” With Bitcoin near $30K, $60K could be right around the corner if this is an accurate patter.

Above base three is base four, meaning there is yet another zone of consolidation somewhere above that will touch down on the curved parabolic trend line a final time. From there, the next time it touches the curved line will be after a peak of the parabolic rally.
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A glimpse into the future? | BTCUSD on TradingView.com
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Will Crypto Parabola Begin Again?

Don’t believe this structure is possible in Bitcoin? Simply take a look at past cycles for an example. In the above chart, Bitcoin formed several bases in a row. After touching the X, price didn’t just “double,” it did 1,700% ROI. Even then, BTCUSD wasn’t done climbing, rallying another 700% from base four.

These figures aren’t probable again, but it speaks to the fact that something big very well could be coming soon.
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Tony "The Bull" Severino

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October 23, 2023