If Bitcoin’s explosive rally in 2019 wasn’t convincing enough for the bears, there is a much-sought-after trading indicator that can prove doubters wrong.
According to anonymous financial expert PlanB, who came up with the Bitcoin stock-to-flow theory, the relative strength index (RSI) vividly shows that we are currently in the early stage of a bull market.
Bitcoin’s bullish momentum
The RSI is a momentum oscillator, which was developed by J. Welles Wilder, that is able to determine whether a certain asset is overbought (above 70) and oversold (below 30).
There are numerous trading strategies that rely on this particular indicator, but Plan B points out that it can be useful for determining Bitcoin’s market cycles.
As soon as the RSI reaches 50, it marks the start of the next bull market. After that, it remains in the 50-80 range until the advent of market bears. The RSI has been in the lower range throughout the whole crypto winter that took place in 2018.
On the verge of a major move
According to Coindesk’s technical analyst Omkar Godbole, the upcoming UTC close will be “pivotal” for Bitcoin given that the bulls have a decent chance to resume the rally that started on Apr. 2.
In order to break out of the great descending triangle, Bitcoin has to print a daily close above $10,822. Conversely, if its price once again tanks below the $10,000 mark, it could open the door to $9,600.