The Bitcoin RSI index has largely risen above the oversold level, breaking the previous trend
Bitcoin’s trend over the last month
In the last few days, there have been some signs that could suggest a reversal of the trend followed by the price of Bitcoin.
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The most evident sign is that of the RSI (Relative Strength Index) which has broken the trend of the last months.
The maximum peak of this indicator in recent months was 78 points on 20 October 2021, when Bitcoin was widely overbought.
Since then, a long descent of this indicator began, culminating on 22 January when it touched its lowest point in recent months, at 20, i.e. widely oversold.
Starting from 21 January, a trend reversal seems to have been triggered for this indicator, which first returned above the overbought threshold, on 25 January, and then even climbed up to almost 42 on 1 February.
After a small and brief decline, between yesterday and today it returned to 40.
The price support positioned around the $37,000 level this week would have allowed the RSI index to start moving away from the bearish trend of the last few months.
According to the well-known trader and analyst Crypto Ed, the price trend of BTC has not yet fully exited the bearish phase, but we start to glimpse the end already even in the short term.
Coming back and it seems that everyone is watching a trend line.
But nobody is paying attention to the RSI….it already broke out of that downtrend!
Before you think I’m calling for new ATH’s: we’re not out of the woods yet, but seeing more up short term. pic.twitter.com/Uz5Lu4TOf1
— Crypto_Ed_NL *not asking to send DM’s* (@Crypto_Ed_NL) February 2, 2022
Unusual yield for US government bonds
Another curious sign is that today, in contrast to what has often happened in the past few days, the price of Bitcoin did not react in the same way to the fall in the yield on 10-year US government bonds (US10Y), but rather rose by 1.5%.
Above all, in January when US10Y went down, the price of BTC often followed, going down almost at the same time, probably because the descent of US10Y to levels that were still decidedly low suggested an escape from risk.
Moreover, the Dollar Index (DXY) also went up today, and often in these cases, the price of Bitcoin goes down.
Losses on US stock exchanges
Moreover, yesterday the US stock exchanges recorded significant losses, with even the Meta (formerly Facebook) stock plunging 26% in one day. In a climate that might seem like a flight from risk, the price of Bitcoin not only held up well, but with the US stock exchanges closed, it rose again to the levels of two days ago.
Finally, it is worth mentioning that during the previous cycle the lowest price during this phase was touched on 6 February 2018, and from the next day, there was a real rebound.