Bitcoin’s recent price action has raised questions about the sustainability of its current bull run, as technical indicators show surprisingly modest momentum despite BTC trading above $103,000. A detailed analysis of the Relative Strength Index (RSI) reveals potential warning signs that traders should monitor closely.
The flagship cryptocurrency has seen an impressive surge from $85,000 to $104,700 since mid-April, largely driven by steady ETF inflows and improving market sentiment. However, recent price action shows signs of stalling at the $104K level, with derivatives data indicating increasing bearish pressure.
RSI Analysis Reveals Concerning Pattern
Chartered Market Technician (CMT) Tony Severino has identified a potentially troubling pattern in Bitcoin’s daily RSI readings. Unlike previous bull runs where the RSI typically breaks decisively above 70, the current momentum appears notably subdued.
The RSI, a key momentum indicator that measures the speed and magnitude of recent price changes, typically signals strong bullish momentum when readings exceed 70. Historical data shows this pattern was clearly visible during both the October 2023 rally and November 2024’s post-election breakout.
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Current Market Conditions
Bitcoin currently trades at $103,676, showing minimal movement over the past 24 hours. The weekly performance has been particularly lackluster, with just a 0.8% increase over seven days. This consolidation phase could be critical, as analysts warn that maintaining support above $90,000 is crucial for continuing the bull run.
Expert Analysis and Future Outlook
While the current RSI readings might concern some traders, Severino emphasizes that the situation could change rapidly. A decisive break above the 70 RSI threshold could signal the next leg up in Bitcoin’s bull run, potentially pushing prices toward new all-time highs.
FAQ Section
Q: What does a low RSI reading mean for Bitcoin?
A: A relatively low RSI reading suggests weaker momentum than typically seen in strong bull markets, potentially indicating a need for consolidation before further upside.
Q: Could Bitcoin still reach new highs despite weak RSI?
A: Yes, the RSI is just one indicator, and Bitcoin could still achieve new highs if fundamental factors remain strong and institutional demand continues.
Q: What RSI level should traders watch for confirmation of bullish momentum?
A: A sustained break above 70 on the daily RSI would traditionally signal strong bullish momentum returning to the market.