bitcoin (btc) has retreated to the $28,400 level following a failed break above $30,000, resulting in a high settlement rate for both long and short positions.
Furthermore, the recent fake news surrounding the approval of Blackrock’s bitcoin Spot Exchange Traded Fund (ETF) by the US Securities and Exchange Commission has disrupted the bullish trend and introduced new bearish indicators into the bitcoin market.
RSI screams sell
Renowned crypto trader and analyst Ali Martinez suggests selling btc according to its 4-hour chart Relative Strength Index (RSI) indicator. Their simple trading strategy advises to sell btc when the RSI rises above 74.21 and buy when the RSI falls below 30.35.
As seen in the chart above, btc‘s RSI sits at the 74 level, which is remarkably high considering that on October 16, after the spread of fake news on several platforms, including X (formerly Twitter), the RSI reached 82.83. .
While this indicator may seem simple, it has proven to be effective on the btc 4-hour chart. For example, on October 1, bitcoin reached a high of $28,500, but after the RSI rose above 80, the leading cryptocurrency quickly fell to $27,150 within hours.
Although the effectiveness of these indicators is not always guaranteed, the combination of the recent false pump, the ongoing pullback evident on all btc charts, the lack of bullish momentum, and the prevailing market sentiment fear, doubt and uncertainty could create the perfect storm for btc to retest lower support levels before potentially embarking on another upward move.
bitcoin Pre-Halving Pullbacks Ring Alarm Bells
To further support Ali Martinez’s bearish thesis, renowned crypto analyst Rekt Capital recently shed light on bitcoin‘s historical pullbacks approximately 180 days prior. Halve events.
According According to Rekt, in 2015/2016, approximately 180 days before the halving, bitcoin experienced a -25% retracement. Similarly, in 2019, around the same time period before the halving, bitcoin retraced -38%.
While Rekt Capital identifies as a macro bull, it acknowledges that historical data favors bearish trends before halving events.
This observation raises the question of whether history will repeat itself in 2023. Will bitcoin witness a significant pullback similar to previous cycles, or will market dynamics in 2023 deviate from historical patterns?
What is certain is that as the crypto community eagerly anticipates the 2023 halving, uncertainty arises regarding bitcoin‘s price behavior leading up to the event.
Based on current market conditions, btc is trading at $28,400, indicating a profitable position on all time frames. In the last 24 hours, bitcoin has seen a modest 1% increase.
Over the seven-, fourteen-, and thirty-day periods, btc posted gains of 3.7%, 4%, and 7%, respectively, despite previous bearish factors. The sustainability of bitcoin‘s current price level remains uncertain as it remains to be seen if it will withstand potential pullbacks soon.
Featured image from Shutterstock, chart from TradingView.com
