A popular crypto analyst says one closely followed indicator suggests that Bitcoin (BTC) still has much to prove even after mounting a strong rally.
In a new strategy session, Benjamin Cowen tells his 782,000 YouTube subscribers that Bitcoin’s Relative Strength Index (RSI) remains at historical lows.
The RSI is a momentum indicator that aims to determine if an asset is currently overbought or oversold.
“It’s a very nice move by Bitcoin from all the way down from $15,000 back up to $21,000. Note that the monthly RSI in November went lower than where it was in June. The monthly RSI is back up to around 44 to 45. What I want to do is draw a line across where it currently is.
Where it currently sits just above this low [in 2019] and it sits basically at the same level as that one [in 2015]. Bitcoin still has something to prove here. It still needs to actually close above these levels and continue higher before it’s actually going to show any compelling evidence here on the monthly time frame.
Note that in 2015, the monthly RSI basically hugged the lows for three-fourths of the year. Until September, the monthly RSI didn’t really go anywhere. In 2019, we were only here for a few months.”
Cowen goes on to say investors should keep an eye on BTC’s RSI as it needs to rise above the historic lows to confirm that the king crypto will flip its current resistance level into support.
“And what’s interesting this time is that despite this move up back to $21,000 we’re just above the levels we were at in December 2018. So the thing that I think we have to look out for is can the monthly RSI actually get above these levels that it was out over here [in 2015] and then over here [in 2019]?”
Bitcoin is changing hands for $21,256 at time of writing.
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