Bitcoin, the world’s largest cryptocurrency, is currently experiencing a period of volatility as it approaches what many believe to be a local bottom. An analyst who accurately predicted Bitcoin’s correction in the first quarter of 2024, known as Rekt Capital, has identified a key technical indicator that suggests a potential trend reversal.
Rekt Capital pointed out that Bitcoin’s relative strength index (RSI) on the daily chart has plummeted into oversold territory. The RSI is a widely watched indicator that can indicate potential turning points in a market trend. According to Rekt Capital, historical data shows that Bitcoin has historically seen strong rallies after the RSI dropped to oversold levels on the daily timeframe.
Based on his analysis, Rekt Capital believes that Bitcoin may find a solid bottom between $78,000 and $71,700. He noted that whenever Bitcoin’s RSI dropped below 28 in the past, the price either bottomed out or was within a range of -2% to -8% from the bottom.
In addition to Bitcoin, Rekt Capital also highlighted the performance of the layer-1 protocol Cronos (CRO), which he believes is showing signs of ending its downtrend with a double-bottom pattern. A double-bottom structure is typically seen as a bullish reversal pattern, indicating that an asset has found a price floor and is poised for an upward movement.
Rekt Capital’s analysis suggests that CRO has broken out from its double-bottom pattern, leading the way for Bitcoin and other altcoins that are also forming similar patterns. This pattern could potentially signal a bullish trend reversal for Bitcoin and other cryptocurrencies in the near future.
As of the time of writing, Bitcoin is trading at $82,207, down over 4% in the past day. Despite the recent price drop, Rekt Capital’s analysis suggests that Bitcoin may be nearing a local bottom and could see a reversal in the coming days.
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