After last week’s Bitfinex and Tether news, bitcoin currently sits in consolidation around the $5,150 zone. Numbers from the Relative Strength Index (RSI) may show the asset has further to fall.
Bearish divergence
An April 29 article from ChepiCap pointed toward multiple technical analysts on Twitter who are speculating on a possible drop in bitcoin’s price.
HornHairs, one of the mentioned Twitter users, made an observation on April 26 regarding bitcoin’s RSI levels, comparative to historical data. The analyst noted recent RSI divergence on the two-day chart, similar to those in history which led to subsequent moves downward in price. Comparing the current bear market to past bear trends is fairly common practice in the crypto space.
$BTC #Bitcoin 2D RSI Bear Div Study:
In the past 5+ years, there have been only 5 accounts of a bearish RSI divergence on the 2D chart
Today will mark the 6th
The average drawdown AFTER the confirmation of those previous divs before a significant bounce/reversal was -44.25% pic.twitter.com/zXsddqrWyu
— HornHairs 🌊 (@CryptoHornHairs) April 26, 2019
On the daily chart, crypto’s largest asset also posted seemingly bearish price divergence in relation to the RSI, prior to the most recent substantial price drop. The price, however, likely also saw impact from last week’s Bitfinex and Tether news.
Image Courtesy: TradingView.com
The Chepicap article also included Nick Cote’s thoughts on scenarios leading bitcoin toward either $4,300, or $6,400 levels.
TA perspective:
Bear: Below the 2018 support level, 3D stoch RSI cross down below 80 + HTF bear div
Bull: Higher highs + higher lows, increased buyer interest from Asia
Low target = $4,300 area
High target = $6,400 areaI think market needs a resolution on Tether situation. pic.twitter.com/lioZRyT9Op
— Nick Cote (@mBTCPizpie) April 29, 2019
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