The recent pullback in the Bitcoin (BTC) market threatens to overheat before a complete downside crash is confirmed, reversing the classic momentum-based oscillator.

RSI is making higher lows
The indicator, called the Relative Strength Index or RSI, measures the speed as well as the change in directional price movement. It works in a specific range of numbers – from 0 to 100. The closer the RSI is to zero, the lower the price momentum. Conversely, a RSI value close to 100 reflects a period of strong impulsion.

The committee also helps in making decisions about buying and selling an asset. In particular, an RSI reading below 30 means that the asset is oversold and therefore attractive to buy. Meanwhile, an RSI above 70 indicates that the asset is overbought, which means that owners will eventually sell to make a profit.

The RSI also allows traders to identify buying/selling opportunities based on deviations between price and the moment. For example, when the price reaches another low and the RSI reaches a higher low, it is considered a bullish buy-reject signal. Conversely, a bearish RSI divergence occurs when the price makes a new high and the RSI makes a lower high.

Thus, Bitcoin appears to confirm a bullish rejection.

Independent market analyst CryptoBirb has found price deviation from momentum on Bitcoin’s intraday chart. There, Alias ​​noted that BTC/USD formed a series of lower lows in the same period as the RSI rose, making higher lows.

Bitcoin price falls amid rising RSI. Source: TradingView.com, CryptoBirb
The announcement came after the BTC/USD exchange rate corrected lower after hitting a local high of $36,675 on June 29. As of Friday in London, the pair was trading under $33,000. The RSI coincided with the last drop and was close to 42 as of the press release, ranging from neutral to bullish.

Many obstacles to Bitcoin
Sentiment in the Bitcoin market continued due to a series of pessimistic events. This included a global attack on cryptocurrencies that began with a ban in China in May and spread to the United Kingdom, India, South Africa and the United States.

For example, the Financial Conduct Authority has banned the world’s leading cryptocurrency exchange Binance from conducting regulated activities in the UK. In addition, the Indian law enforcement agency has issued a warning to Binance affiliate WazirX for facilitating money laundering.

More obstacles arose due to hints of hostility on the part of the Federal Reserve System. The US Federal Reserve surprised bitcoin investors with its sudden intention to control inflationary pressures with the possibility of a rate hike in 2023. BTC/USD fell more than 28% after the Fed’s big exposure, but later rebounded after finding strong support around $30,000.

However, the bulls continued to maintain the bitcoin price’s momentum above the $40,000 level. As a result, the cryptocurrency remains in the range of 30-40 thousand dollars, without showing a clear trend in the short term.

Bitcoin expects to test the support line of its current channel after its recent failure. Source: TradingView.com
Konstantin Anisimov, CEO of CEX.IO, also noted that accredited investors are starting to distance themselves from bitcoin due to its environmental impact. He added that the usual interest in cryptocurrency will return when miners switch to alternative sustainable alternatives.

“When environmental issues are no longer a concern, many institutional investors are likely to trust the digital currency and therefore buy more,” Anisimov told Cointelegraph, adding:

Bitcoin short-term forecast of $50,000 and long-term forecast of $75,000.

Source: CoinTelegraph

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