Topic: Weekly RSI leaving oversold conditions - page 2. (Read 1270 times)

Definitely, we need the TA to look at where the market could possibly go.  We tend to play this game to make money. Just like you, we trade oftentimes when there is an opportunity.



This is a monthly chart where RSI had not yet bottomed. We might be able to see this likely going to happen because of the panic due to the economy falling down actually and we are still early in this winter.

Well put. I do otherwise think news can effect price short-term, but that usually it's "priced in". For example recession and war, these factors have already been priced in and have been a factor for months already. Markets usually bottoms 3-6 months before the worst is over. People don't sell at the point where the economic climate is at it's worst, they sell because they are anticipating the worst. It's a lagging indicator at best.


I guess I've always been expecting a 3-6 month bottom, similar to 2019 as well as 2015 to some degree, as well as ironically like right now, rather than 2020 re-test of the lows. But you raise a valid point that a low below $17.5K could well be like 2020 with a quick wick and price recovering back to a sensible level shortly after. It also makes sense if price is coming down to around an 8-10 year average for an asset that's 12 years old, as it would be considered by many who believe in the fundamentals rather than the macro climate fears that price is at an enormous discount never seen before, roughly 50% more than usual.

To be fair with March 2020 however, there wasn't any fear in December 2019, it was the spread and when lock-downs were being considered or happening in March that the fear set in, or otherwise fears of immediate recession. So in this sense, for the short-term price action, I can see how it affected everything. But also the swift recovery was based on the fact that the news wasn't that relevant after all (hence bear trap). Some would say that price was destined to re-test the 200 Week MA one year later, and therefore it presented a great buying opportunity, regardless of the macro environment.

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Also worth pointing out that despite the short-term, as well as now mid-term bearish outlook, not all hope is lost in the long-term, based on the original title of this thread at least:



While it seems unlikely, as well as to myself, if price does rebound next week after closing this week near to oversold conditions (which is looking likely) it would be a bullish re-test of oversold conditions. Price could then be trading back in the $20K to $22K accumulation zone, but with the bullish factor of finding buyers prior to becoming oversold again. Call it hopium, but that's how it'd look to me if it occurs.

Because people believe in news. They don't actually believe in White paper, core concept, power of the network, effect of finite controlled supply, possibly lost Bitcoin, etc.

Additionally, they believe in news as the reasons of all falls or rises of Bitcoin. When they have a few years in the market, they will realize news are not real reasons of market movement.

Trap or not, if it happens, it will be actually a lower low or a final bottom. Like the crash in March 2020 (as some believed it is because of Covid19), then price soared to the moon after washing out all weak hands. In fact, Covid-19 outbreak was in December 2019 and after 3 months, we knew that it was already a pandemic but just lack of the official announcement from WHO. After WHO made a press conference to announce it as a pandemic, namely Covid-19, all markets collapsed.

Do people believe the announcement is the cause of market crashes? It's not!

Whether related to "fundamental news" or not, the technical analysis not only suggested the likelihood of this exact this scenario, but it also happened: a drop to around $18K to $19K depending on how you measure the move of the descending triangle. I've never understood the concept of not being able to use technical analysis, as regardless of the news, this was the most likely scenario at play.

The only times I do find "fundamental news" relevant is when TA suggests the likelihood of a scenario happening, and instead the opposite occurs, then it can be attributed more to such a news event. Given that (imo) there are enough TA & fundamental factors to confirm the low is already in at $17.5K, if price breaks below this, then it'd be fair to attribute to the macro climate. Especially if a bear trap low occurs.

I don't mean to sound rude or disregard your argument, but merely that one doesn't need to follow the news to see what was most likely to happen in this case, or attribute the news to such predictable price movements.

This plunge I think is more related to the fundamental news we see today with the war getting more brutal when it comes to sanctions which Russia had retaliated thru the gas pipe. I'm not sure if we can use the technical analysis anymore for this. If it breaks that last support on $17K, I'm not hoping it will happen but there is a possibility for $14k.

There is no way out of this if the economy is not rolling especially if this war prolongs. We can already see people burning thier electricity bill and demand not to pay their taxes. Looks like an apocalyptic scenario as they protest on the streets.

As an update, price now appears to be forming a bearish descending triangle, with similar target as referenced previously. Price is continuing to get rejected by the 50 MA despite flattening out (shedding it's bearish bias) while the week-long horizontal support continues to weaken. While price has barely changed since previous update, the short-term bearish price structure has grown considerably, despite bullish divergence.

The neutral outlook would be reclaiming $20.5K and invalidating the short-term lower highs structure, but without returning to ~$21K distribution zone the short-term bullish would still be lacking.




Despite price remaining within the accumulation/distribution zone ($19.8K to $22K specifically), price is failing to find support from this lower level. As previously referenced, the RSI remains bearish and threatening to return to oversold levels if $21K (volume point of control) isn't reclaimed. The 50 Day MA is soon to start declining rapidly, returning the bearish confirmation in the mid-term as price remains below.




This still remains the case, that a higher low is still more than possible, similar to 2019 price structure which also at the time had a considerable bearish short-term outlook. Additionally until the long-term trading range is confirmed as distribution, it remains an accumulation zone with price within it off the lows. The Weekly close yesterday above $20K was almost promising, but still lacks any bullish follow through.

Despite avoiding a new monthly low close below $20K yesterday, price is failing to confirm this level as support, instead creating lower highs in bearish fashion. If current price action is again within a bear flag structure, then the target would be around $18K to $19K, between the recent lows and lowest 4hr close. At present, this looks increasingly likely rather than re-testing $21K previous support.




The bullish divergence on the 4hr remains in tact, but this doesn't rule out a move towards $18K in order to further confirm. With further rejection from the neutral level of 50, this also looks increasingly likely.


Finding support from the lower band of the accumulation around $20K still remains to be seen, with instead the Daily RSI getting rejected from neutral territory (40-60) and remaining bearish. After the initial bounce from oversold territory last week, price is threatening to return to oversold territory unless $21K is reclaimed in the coming days, followed by moving above $22K in order to return a bullish bias.



The only realistic hope is that price is now at the 0.236 fib retracement from $17.5K low to $25K, which is the same retracement level that price formed a higher low in 2019 to confirm the bear market low after moving from $3.2K to $4.2K and back down to $3.4K, so not all hope is lost quite yet. $20K is therefore the "line in the sand" for the bulls to confirm $17.5K as the bear market low, which remains entirely possible.


Outlook now changed to short-term bearish, but still mid-term neutral as price remains within the accumulation zone.

Price action today remains promising, despite the bearish looking double bottom in the short-term. Overall the bulls are continuing to defend $20K levels with a desire to push prices back to volume point of control around $21.4K in order to try and neutralise the current short-term bearish momentum. If it weren't for the bullish divergence referenced below, I'd be a lot more bearish at current prices.




With price re-testing $19.5K level and swiftly rebounding back above $20K, this has helped to further confirm the bullish divergence on the RSI as currently on the 4hr price strength remains neutral around 50, despite the high volume selling yesterday. It remains to be seen whether there will be a short-term relief rally to the upside before breaking the lows, but for now bears are struggling to push prices lower.




Long-term accumulators are continuing to defend the $20K level as the lower band of this long-term trading range for the third day now which again is promising, but without a move back above $22K in order to re-confirm it as an accumulation zone, it remains a trading range. Similar to the 4hr, price will need to move back to $21K in order to neutralise the immediate bearish outlook of lower prices.




Outlook remains the same, short-term slightly bullish, mid-term neutral as price consolidates within an accumulation zone and long-term optimistic that the low is already in.

Has been a few days without analysing the price, as it fell from the volume point of control from $21K down to $20K. Price today is attempting to bounce back from the lower level of the accumulation zone which is promising, but remains far from convincing for a reversal. Resistance to the upside will come from $21.4K local distribution level, followed by $23K levels where price initially fell from. The break-down target from the bear flag remains at around $19K, but given price has already reached $19.5K as bulls begin to defend $20K, it seems price has already fallen far enough, as the bearish momentum short-term begins to subside.




There is some hope on the 4hr as the RSI has confirmed strong bullish divergence after re-testing oversold conditions, similar to the previous lows in May and June, this time at a higher price than yearly low. However given the resistance over-head, it's difficult to confirm this as a local low until price moves above $22K and outside of the current accumulation/distribution zone, in order to confirm it again as accumulation.



On the Daily chart price remains within the accumulation zone of $20K to $22K after briefly dipping below to $19.5K. As previously referenced, convincingly moving below $20K would return the bearish momentum long-term, but fortunately the bears have yet to achieve this, hence despite the bearish posture of price structure, I'm remaining neutral within this accumulation/distribution zone.



On the Weekly chart price closed at the second lowest level this year at $19.5K, just above the 2017 ATH closing weekly price of $19.3K. While the low close is certainly concerning long-term after failing to turn the 200 WMA into support, the RSI hasn't yet returned to oversold conditions, while price bouncing back this week would help to further confirm $17.5K as a low.



While not expecting a quick reversal back above $22K this week, I am anticipating further accumulation and distribution between $20K and $22K, specifically long-term buyers against short-term sellers, that now includes buyers from the previous two months who initially intended to be long-term holders but have changed their minds. Until then, price remains neutral within this zone until further confirmation.

Price is continuing to defend the long-term and shorter-term volume point of control (accumulation level) around $21K. Yesterday closed with another wick to the downside, showing that buyers remain present, despite being unable to push prices higher. While remaining bearish short-term, my bias is beginning to shift back to neutral as bears fail to push prices lower for yet another day, despite the bear flag pattern.

 


Despite anticipating a re-test of the lower level around $20K based on RSI previous fractals, it seems that for now that the 4hr has avoided this re-test, instead comfortably returning to neutral RSI levels instead of being rejected and re-testing oversold conditions, as per previous times when the RSI reached deeply oversold levels <20. The notable difference being that this time around, it hasn't been with a new bear market low.



Price otherwise remains within a bear flag structure, that if broken targets around $19K (even if those prices are short lived). Personally I think the bart pattern back to the upside now remains just as likely given the bearish pressure is subsiding, as noted by the RSI as well as the CMF, that has returned to positive after 2-month lows. Although low volume, the buying pressure has reached similar levels to previous peaks in price last month at $24K as well as $22.5K, despite being at relative lows, which is a positive sign as well as difference compared to previous lows.


Although still anticipating a move in either direction as opposed to further consolidation at relative lows, based on the current bear flag structure the measured move target would be around $19K, even with $20K holding as support, so wicks below the accumulation level can't be ruled out at this point. Despite last week closing bearish, the bears have so far failed to follow through this week it's worth noting.

I believe that bearish closing mainly happened because of the fear index situation. I mean people are scared a ton because of the bad news coming from mt.gox trustee considering to sell their tens of thousands of bitcoins and that’s mainly the reason why it’s like this. People need to realize that there isn't a situation where we are doing something wrong right now, it’s doing fine and we shouldn't be worried about it.

This is what the world is all about and the problem is that crypto could have bearish moments that is "fabricated" basically and not data backed, all because of some news. This doesn't mean that it is really bearish, it is just looking like that.

Not much has changed on the Daily chart today, only that as time passes without $22K level being reclaimed price looks increasingly bearish in the short-term while under the 50 Day MA. Hence re-testing the lower boundary of the accumulation zone around $20K becomes increasingly likely, however if this occurs I do still think this will hold in the long-term, based on the long-term accumulation so far. While $20K to $22K remains a good level for long-term accumulation, it looks far from a good trading opportunity, with either returning back above $22K or re-testing $20K looking like a better risk/reward entry price for long positions.




As with the Daily chart, the 4hr remains bearish with the bearish crossover of the 50 & 200 MAs that are now both declining, despite the bulls continuing to defend $21K. As with the daily chart, reclaiming $22K would help to confirm a higher low, but otherwise based on recent RSI fractals, it looks likely for price to re-test around $20K in order to form a higher low and re-test oversold conditions, similar to previous bottoms.




With the V-shaped recovery very much off the table, a swift recovery would be more likely in the form of a bart pattern (green fractal) if the bulls fail to push prices back down to $20K. After a few days of consolidation within a tight trading range since the weekend, the market looks ready to make a move either down to $20K or back to $23K recent local distribution level, whith bearish price action favouring the former level for now (blue fractal). Somewhat optimistically, in the mid-term (next couple of weeks), I do see the 200 WMA being reclaimed again, despite remaining neutral at current prices within the $20K to $22K accumulation zone.

On the Daily chart the bulls continue to defend $21K, however there remains low buying pressure as well as low volume as price struggles to move higher. With the week closing bearish yesterday (-11%), price risks falling lower to the lower range of accumulation around $20K if the volume point of control can't be maintained as support. Mid-term I remain neutral as price consolidates within this critical accumulation zone.




On the 4hr price is looking more bearish than bullish as price struggles to leave the accumulation zone around $22K, only to be rejected and return to $21K. While continuing to hold $20.8K remains positive, this support is only weakening as bears continue to re-test this level as support. As previously stated, price needs to move above $22K in order to return some bullish bias, that so far remains elusive.




While still possible to see a swift recovery this week from support levels, the V-shaped recovery is looking increasingly unlikely as price consolidates sideways for the past two days, with neither the bulls nor the bears able to move the price in either significant direction. Avoiding an early week correction (as has been the case in previous weeks), after a bearish weekly close, would be a positive sign however.

TL:DR: Short term bearish, mid-term neutral, long-term optimistic.

After reaching the break-down target of $20.8K, price has since found some buyers. Although far from a convincing higher low and support level, bulls have managed to avoid catastrophe by managing to hold this key level as support for now. With price only 2.5% away from $22K levels, re-confirming the $20K to $22K level as accumulation would return the bias in favour of the bulls for the mid-term.




With the 50 & 200 MAs crossing bearish, the 4hr chart isn't looking as hopeful as the Daily chart with price now in a range between local accumulation and distribution levels $21K and $23K, with the latter likely to act as new resistance where the 200 MA lies. After the RSI reached sub 15 levels, price has now returned to bearish territory, indicating a local low could have been formed for now.




The fractal for a V-shaped recovery remains in tact so far, but price will have to rally in the coming hours and days in order for this to confirm, otherwise re-testing lower in the accumulation zone around $20K becomes increasingly likely. With the Hash Ribbons indicator now signalling a buy on the Daily time-frame, there is now understandably increased optimism that price will continue to move higher, as network growth returns.

33 means it's bearish, not oversold. <30 is oversold, 30-40 is bearish. For sure it could return to oversold conditions <30 which could provide another good buying opportunity.

Bitcoin's Weekly RSI has never reached 20, only 25 at lowest (this year), but sure you could wait for 20 and it'd be a good buying opportunity if it happens, even if unlikely imo.

The RSI indicator is indeed very helpful for predicting or analyzing the trend of a price,
here indeed the RSI of Bitcoin on a weekly time frame is still at 33, meaning it is already oversold,
but I think the trend will still fall below 30, and if the RSI is already at number 20 then that's the time for us to buy!

As for a Weekly RSI update, last week price strength failed to close above 37.5, that remains relevant in the context of 2019 bear market. The RSI was initially rejected from this level and price saw a correction, with the trend reversal then confirmed above it. Currently this bear market has taken a similar path, that of being rejected by 37.5, with the hope of finding support around 34 this week, or risk falling lower to re-test oversold conditions, such as in 2015. Although far from an exact science, given in 2015 the re-test of price strength was much lower prior to a trend reversal (at 32), the patterns remain relevant today.



I still very much consider the bottom to be in, but as explained the RSI leaving oversold conditions doesn't confirm a trend reversal, only that the bottom is currently forming.

After high volume selling yesterday, the highest since the capitulation to $17.5K, price has now reached the break-down target of $20.8K volume point of control. Within the overall accumulation zone of $20K to $22K, price remains relatively neutral (but within a bear market) at this support level, despite being under the 50 Day MA that will now begin start to flatten out in order lose it's mid-term bullish bias.




On the 4hr, price is now between the local accumulation zone of $21K and the distribution zone of $23K. The 50 & 200 MAs are about to bear cross, confirming the end of bullish momentum on this time-frame, with the RSI reaching the lowest oversold conditions since June 13th. The possibility of continuing to the downside towards $20K remains high, unless bulls can recover the price back above $22K.




As previously mentioned regarding this fractal, there remains a strong possibility of a V-shaped recovery, based on the previous fractal of a sort of rising triple top, before breaking resistance to the upside, however falling any lower than the current support level would negate this type of immediate recovery. Price has now corrected -17% from the swing high, similar to the early July correction of -16% from $22K strong resistance to $19K.

As emphasised throughout the week, breaking below the $23K level local accumulation level would most likely bring prices down to $22K previous resistance levels, with a target of long-term accumulation level around $21K. Now that this has happened relatively quickly, as expected with such break-down patterns and trend reversals, we can confirm the short-term bias favours the bears again. But for how long?




Despite failing to find any buyers around the 50 Day MA, priced at $22.2K, there still remains the long-term accumulation level around $21K that will likely act as the "last line in the sand" for the bulls. Though the lower level of the accumulation zone around $20K can't be ruled out for any quick dips/wicks to the downside, failing to hold the volume point of control as support would turn my mid-term bias from bullish to bearish.



The current short-term positive outlook would be that price has already fallen enough to the downside in order to find support, despite not quite reaching the target of $21K. Similar to the move from $24K to $21K, as well as $22.5K to $19K prior to that, price has since corrected -14% from the swing high. Therefore it remains more than possible for price to quickly find support before continuing to rally to the upside.


 
While this may seem like a hopeful outlook now that $25K has been confirmed as a strong resistance level, similar price action occurred last month from the $22K resistance level, whereby after two -15% corrections, price quickly rallied back to the upside. I otherwise realise that for many it's a time to panic, but personally I see it as a time to remain cautious and wait for buyers to step in rather than catching a failing knife.

On the weekly chart, after 6 weeks of bullish looking candles, this week looks set for bearish candle unless $23K can be reclaimed as support (where the 200 WMA lies). While unlikely it does remain possible, though I'm more inclined to think any immediate bullish price action would return next week, after what I believe will be a fake-out to the downside before returning to the $22K to $24K range.

Today price is attempting to hold trend-line support of the bearish rising wedge close to the rising 200 MA. A break-down from the wedge remains around $21K, although there remains an argument for further consolidation around $23K as well as support from $22K, as shown on the daily chart. A volume point of control has now moved to $24K now confirming more distribution above than accumulation below.




On the daily chart, price remains between $24.5K resistance (bearish down-trending 100 Day MA) and $22.2K (bullish rising 50 Day MA). Reclaiming a closing above $24.5K (+5%) would return the immediate bullish bias on this time-frame, while a break below $23K local accumulation would continue the bearish trend towards $22K with long-term accumulation average priced at $21K.




It's so far worth noting that price is currently following the previous corrective/consolidation pattern of -9% to $23K which is hopeful, as opposed to more aggressive bearish corrective fractals of -14% that would take prices below $22K. Either way, the type of correction will likely confirm itself in the coming days, dependant on holding $23K support level.