The Relative Strength Index (RSI) is an critical indicator for any cryptocurrency, and Bitcoin is no exception. Given that the pioneering cryptocurrency has been around the market the longest, the abundance of data allows this indicator to be used to determine which direction the price might be heading. This time, the indicator is becoming bearish, which means that Bitcoin’s price could be heading for a further decline.
Analyst Says RSI Turns Bearish for Bitcoin
Cryptocurrency analyst Alan Santana took to TradingView to participation bearish development of Bitcoin price. The analysis, which focused on the Relative Strength Index (RSI), shows a continuation of the bearish trend, as Bitcoin is ready to decline further.
The cryptocurrency analyst, using a weekly Bitcoin chart, shows that the RSI is indeed showing a 3-year bearish divergence. This is confirmed by the RSI chart, which has shown a continuous decline throughout 2024 after reaching a local high earlier in the year.
Bitcoin RSI is down about 42% since the beginning of the year, reaching 88 to 50.6 at the time of analysis. However, Alan Santana uses a longer time frame from 2021 to 2024, showing a bearish divergence for this indicator.
This bearish divergence came as the RSI indicator presented a lower high in 2024 compared to its 95% high in 2021. According to the analyst, this means that the RSI indicator is now turning bearish for the first time since August 2023. This makes it the most bearish Bitcoin indicator in a single year.
How low will the price of BTC fall?
At the time of analysis, the price of Bitcoin had already seen a edged decline from $70,000 to below $60,000 before a petite rebound at the time of writing. However, the crypto analyst does not believe this is the end and warns investors to expect a further decline.
Judging by the chart, Alan Santana expects Bitcoin to drop more than 20% from this point. That would mean the price would fall below $50,000. The crypto analyst estimates the bottom of that drop to be around $44,000.
If this prediction were to materialize, it would mean the price would once again breach the $40,000 level for the first time since January 2024. However, it’s not all bad news, as the crypto analyst explains that “This and other signals tell us that there is room for prices to go lower; much lower, before we experience new highs and a sharp increase.”
Featured image created with Dall.E, chart from Tradingview.com
