Bitcoin’s Monthly Relative Strength Index (RSI) shows that the dominant cryptocurrency is bracing for a fresh rally.
Is 2021 the ideal time for Bitcoin to grow?
The Relative Strength Index (RSI) is a momentum indicator that measures whether an asset is overbought or oversold. When the RSI crosses above 75, this indicates that the asset is in the overbought region, and when it drops below 30, it means that the asset is oversold.
The trading nickname “Crypto Capo” noted that Bitcoin’s monthly RSI would close above 80. Historically, when this happened, BTC saw a strong rally after that.
Although Bitcoin’s monthly RSI is above 80, which is technically oversold, the Bitcoin RSI tends to be oversold for extended periods of time during the bullish cycle.
As such, traders often look at the oversold RSI on a high time frame chart, such as the monthly candlestick chart, to forecast an extended rally in the short to medium term. The merchant said:
“The monthly index is about to close above 80. When this happens, the trend will continue from the average. The yield is 1,010.87%. Each cycle is shorter.”
However, the trader emphasized that one indicator cannot accurately predict Bitcoin’s price cycle. Crypto Capo made it clear that combining some signs could serve as landmarks in the future. he wrote:
“You cannot base your forecast on a scale. We combine several methods of obtaining future evidence to see which is more likely but ultimately we adapt to what the price is doing in the present.”
“The year of beginning is approaching”
Traders have different views on the direction of Bitcoin in 2021, but most traders are still very optimistic.
Michael Van Diop, an analyst at Cointelegraph Markets, said he expects Bitcoin to convert $ 65,000 to $ 85,000 by the end of next year. He said:
“I have to reconsider my opinion on the potential level of BTC USD by the end of 2021. With this latest increase, I projected it to be between $ 65,000 and $ 85,000 by the end of 2021. In the optimistic next year.”
Meanwhile, the options market estimates the likelihood of a Bitcoin selling by next year at $ 120,000 with a probability of 22%, which could also serve as a potential guide to understanding the trend of BTC in 2021.
However, in the short term, some traders are wary of entering short positions. The trader, alias TheBoot, said the ideal scenario would be to wait for Bitcoin to consolidate to $ 25,000 or enter the market after the next price increase. Dealer explained:
“Here IMO there is no need to rush to trade with the effect of $ BTC. Better to wait long until 25k or mid-24k. Instead, wait for the next stop and come back from there.”
Cointelegraph previously reported that whales have been buying bitcoin more aggressively since Christmas, which could increase the likelihood of bulls entering bitcoin in 2021 in the medium term.