Topic: Weekly RSI leaving oversold conditions - page 4. (Read 1270 times)

With price already reaching $22,950 today, $75 from the 200 WMA lies ($22,875), this does already look like a "far enough correction", especially after yesterday's weekly and monthly close. Tomorrow the 50 Day MA will begin rising again for the first time since March before the +20% move to $48K, confirming a trend reversal in the mid-term with a target of the 200 Day MA currently priced at $34K but fast declining.




On the 4hr, price is now finding some buyers close to the 50 MA ($22,850). Reclaiming as well as re-testing $24K could well see the immediate continuation of bullish momentum. Otherwise the lower levels of support will likely be re-tested if reclaiming $24K fails, approximately around $22.5K (last weeks opening price) as well as previous resistance level $22K where the 50 Month MA is based.




Yesterday's weekly close at $23.3K, crucially back above the 200 WMA, is certainly bullish. Despite the week only closing +3%, price otherwise rallied +13% from the weekly lows. With a correction already taking prices down to re-test close to the 200 WMA just below $23K, this week looks set for bullish continuation to the upside with further confirmation of a low being formed. After closing 6 weekly candles below the 200 WMA, it could take a similar amount of time to establish this important MA as support, but in previous bear markets the confirmation of support usually occurs much faster.




With first level of support now more or less tested, there could be more levels to re-test this week or next if resistance around $24K remains strong.

Yesterday printed another doji reversal candle, confirming selling pressure above $24K and therefore increasing the likelihood of a correction to $22K to $23K levels. While the RSI has returned to the border of bullish territory from neutral, the 50 Day MA is beginning to flatten out and will start rising in the next few days (if price remains above it), suggesting a more mid-term trend reversal is underway.




Buyers have continued to defend $23.5K after rejection from $24.6K. Despite the 4hr RSI cooling off to neutral territory, the current support level looks relatively weak unless price can reclaim $24K. The trend remains bullish with the 50 & 200 MAs rising and in bullish formation, but there is some bearish divergence on shorter time-frames, additionally suggesting a pull-back is increasingly likely.




Price remains at +5% for the week and up 15% from the lows, as well as crucially above the 200 Week MA at $22.8K. A close today above this level would likely signal continuation of bullish momentum, even if first a dip to $22K to $23K levels at the start or the week remains likely, in order to re-confirm the 200 WMA as well as possibly the 50 Month MA as support, which would increase bullish confidence.

Key support levels to watch for a pull-back next week will be the following:

200 Week MA @ $22,880 (+$85)
Weekly open @ $22,580
50 Month MA @ $21,990 (+$350)

After printing a doji reversal candle yesterday price continues to re-test $24K+ today highlighting strength in the current rally, despite also the lack of correction. With the market entering the weekend, it seems an unlikely time for a breakout to the upside (due to lack of volume), but dip buying remains likely with the weekly open at $22.5K and 200 WMA at $22.8K, as the week looks likely to close above these levels.




Despite anticipating a short-term correction in order for price to cool off, the 4hr today remains at higher levels so far as buyers have stepped in at $23.5K, while price otherwise consolidates sideways.


The moving averages (50 & 200) have otherwise started increasing again, again confirming the bullish momentum in play, with support now likely to be found around $22.6K (50 MA).



With the week due to close tomorrow, as well as the month, price remains strong with at present a +7% weekly after a 17% rally from recent lows. Despite anticipating a 10-20% weekly candle earlier in the week, price has none the less increased by 10-20% this week. Tomorrow therefore looks likely to reclaim the 200 Week MA ($22.8K) as well as the 50 Month MA ($21,650), in order to further confirm a trend reversal.


The short-term target for a continued to break-out as well as trend reversal would initially be around $30K levels, where previous volume from the past 18 months is based, as well as the 21 Month MA that is fast declining to these levels. While likely to act as strong resistance (after being strong support), it may not hold as resistance for long if the bullish momentum continues.

Yesterday price closed at $23,850, the highest level since the capitulation on June 13th. As previously referenced, this rally is different than previous ones as RSI re-tests bullish territory. However the 50 Day MA continues to decline and will continue to do so for the next few days, so re-testing this level in the coming days (around $21.5K to $22K) can't be ruled out, despite the bullish rally.




The RSI is now testing overbought territory on the 4hr as price begins to face selling pressure after creating a higher high, as well as likely profit taking from shorter-term traders.


With the 50 MA around $22.5K and 200 WMA at $22.8K, this range could act as support for a quick correction in price, in order to additionally create another higher low.




Despite considerations for a correction on shorter time-frames in order for price to cool off, this could well be short lived as price remains +5% on the weekly chart after creating a bullish wick to the downside. The weekly open is otherwise at $22.5K, similar to the 50 MA on the 4hr, so there is a strong reason why price would find support from this price level, as well as the 200 WMA that could now begin to act as support.



It's worth noting that the month will also come to close at the end of the week, and price remains above the 50 Month MA at $21,640.

Price closed yesterday back above $22K as now the 21 & 50 Day MA are bull-crossing, thus confirming $20.8K volume point of control as support as well as V-shaped recovery fractal. There is now an argument for "this rally is different" after the short & mid-term MAs have crossed bullish, as this hasn't been seen since $40K levels. The target would therefore be a re-test of the 200 Day MA currently around $34K.




On the 4hr price remains bullish. The RSI has returned to bullish territory >60 but not yet oversold, so plenty of room to the upside. There has been some selling / profit taking around $23K previous resistance level, but so far today price remains strong after a +5% high volume candle yesterday. The MAs remain relatively flat indicating some consolidation could come before further upside, though bulls remain in control.




As previously anticipated after RSI left oversold conditions, the weekly chart is now printing a bullish wick showing buying pressure at lower levels, while also attempting to follow through on last weeks bullish momentum. With the third re-test of 200 WMA, this resistance level is becoming weaker as bulls continue to buy dips below this price ($22.8K).



Naturally a close this week back above the 200 WMA, or even closing above weekly open of $22.5K, would likely signal further upside in the coming weeks as the trend begins to turn around from bearish to bullish.

On the Daily chart, price found buyers below $21K, around the 8 month long volume point of control as anticipated, while the 21 & 50 MA are due to cross bullish in the coming days. With these MAs at $21.5K and $21.8K, closing back above $22K would paint much more of a bullish picture prior to the previous rally above these levels, as price would be above both these MAs as they cross bullish.

 


On the 4hr price is so far finding support above the 200 MA at $20.9K (trending bullish) after the bull-cross of the 50 & 200 MAs, even if far from convincing yet. Overall, while many believed breaking below $22K would invalidate any short-term bullish momentum, this time-frame remains relatively bullish finding support from it's long-term MA, as well as from RSI oversold conditions, again at higher levels.




With the previous bear flag structure invalidated after price broke through $23K resistance, and now attempting to form a higher low around $21K while continuing to follow the corrective fractal from late June, a re-test of resistance levels around $23K to $24K looks increasingly likely if support can hold. Failure to reclaim $22K threatens to turn it back into resistance, but so far the bulls have the upper hand.

Looking at the Daily chart to begin with, after the previously referenced fractal played out, price is now at the volume point of control around $20,850, where price will need to find support in order to continue trending back to the upside. Falling below the 21 & 50 MAs on this time-frame is undoubtedly bearish after rejection from higher prices, however the 4hr is well positioned to provide some assistance in finding support.



On the 4hr price is at the 200 MA that has begun trending upwards in bullish formation. Failure to hold this support will increase the chances of a re-test of $20K. Personally, I see the likelihood of price finding support around this level based on the same fractal from late June as price re-tests oversold conditions on this time-frame. There are also longer-term bullish factors  in the background to consider here.



As a reminder of why I think level is likely to act as support, despite the correction or short-term trend reversal currently occuring:


The Weekly RSI otherwise remains outside of oversold territory with room to the downside in order to re-test this level (30) as support, likely around $20K. Despite the 7.5% move to the downside this week so far, I remain bullish, as today is only Tuesday and within 5 days price can relatively easily close back weekly open of $22.5K (creating a bullish wick) based on current fractal pattern in play.

Price closed the week above $22K, confirming a weekly close on the RSI outside of oversold territory. Despite failing to hold the 50 MA as support on the 4hr, as well as being unable to close the the week above the 200 WMA (now at $22,785), price has established a short-term bull flag with a target of around $28K (flat poll measured move) if it breaks to the upside.




Not much has changed on the Daily chart as price continues to trend downwards along the 50 Day MA. Breaking down below $22K (current prices) increases the chances of a re-test of $20,850 volume point of control, as part of previous fractal. The Daily is looking somewhat bearish, however the 4hr remains relatively bullish while the weekly chart is shedding it's bearish bias.




Despite rejection from closing above the 200 WMA (by $115), I'm still expecting bullish continuation this week now that price has already wicked 6% above this moving average, even if a short-term pull-back comes first. The week none the less closed bullish with +8.6%, the highest weekly candle since March. I think current or coming dip will be for buyers, not for sellers, now that price has confirmed some strength.

Price is currently finding some support from $22K and re-testing the 200 WMA. Closing the week above this level would be bullish for a few different reasons, namely the Weekly RSI.




Price continues to follow the 50 Day MA downwards closing $60 below this moving average yesterday. I see increasing possibility for a re-test of $20.8K strong support after 4 consecutive red candles, based on a a fractal move from late June, but closing the day above $22K would make this less likely based on the weekly chart. Moving back above $23.8K (lower high) would likely confirm the uptrend remains in tact.




With the Weekly RSI due to close outside of oversold territory this week (bucket list criteria for a Bitcoin low) this would likely generate enough confidence for reclaiming the 200 WMA next week (if not also this week):



The weekly candle is currently at +9%, otherwise the biggest weekly increase since March (4 months ago), slightly more than early July's +8% move from $19K lows. A bullish weekly close could lead to another week of consolidation like in mid-July, but otherwise with RSI leaving oversold conditions and moving above the 200 WMA I see much more liklihood of bullish continuation with a 10%+ candle in order to re-test $25K.



In recent weeks price has otherwise increased by almost 30% on low volume. With the capitulation somewhat considered in the past, a return of significant volume could see prices increase considerably more than just 10% in a week if the low is considered to be in. Don't be surprised to see a 20% move all the way up to $28K in one go.

Despite maintaining higher levels in recent days, price is now testing $22.1K where the 50 MA lies on the 4hr. Price will need to find support around this level or risk falling back down to the 200 MA around $20.8K. Both MAs are fortunately rising in bullish formation (upwards), though the 50 MA has failed to act as support in recent months. Failing that, a re-test of $20K support becomes the bearish alternative.




Price closed again above the 50 Day MA but otherwise continues to trend downwards as it now threatens to close below. While the most volume traded since $69K high (past 8 months) has now been in the $20K to $22K range as price remains above this level, failing to find support from here would signal bearish continuation. The point of volume control is currently at $20,850, an important level to watch.




With the Weekly candle again facing rejection from the 200 WMA, a re-test of volume support on this time frame becomes more likely, or otherwise the weekly open around $20.8K. Unlike the Daily chart, support remains around $18K to $20K based on 20 months of trading, while the RSI still intends to close outside of oversold territory (currently at 32.5) for bullish setup next week if it closes at current levels or >30.



In summary, there is a lot of relevance to $20.8K on various time-frames level: the 200 MA on 4hr, volume point of control for past 8 months, as well as weekly open.

I think your prediction might be right, OP. It looks like it is oversold, and there is some little FOMO building now in some charts.
If bitcoin enters a bull market now, then we might have a very different cycle here.

So far price has been holding $23K for the third day now, notably finding support from $22.5K previous higher high. Price has now started to find more buyers than sellers below the 200 WMA ($22.7K) and hasn't even retested volume support around $21K to $22K, showing short-term bullish strength and increased confidence in the market, despite initial rejection from >$24K.




Price has now closed 3 consecutive daily candles above the bearish trending 50 Day MA (currentl $22.5K), providing far less resistance than expected, while the RSI flirts with bullish territory. A break back above $24K would likely see the re-test of $30K levels in the coming days or weeks, based on the considerable trading volume gap beween $24K and $28.5K. Otherwise in the short-term, a quick re-test of support if bulls fail.



As the market enters the weekend, the week otherwise remains strong maintaining a 13% gain. Despite bearish news of Tesla selling their Bitcoin in Q2, price reacted with a 0.31% loss for the today as traders bought the dip. This is now the second time bearish news hasn't negatively affected price, such as CPI announcement that so far has led to a 20% increase in price.

Despite many still expecting a bullish fake-out, longer-term trend reversal indicators appear to be taking affect and influencing the short-term price action, despite remaining in a bear market.

After price broke through $23K, closing multiple 4hr candle above this level and the bear flag structure, price is now back below $23K. Failure to maintain above $23K currently puts $20.8K level back on the table as support, where the 200 MA has begun trending upwards in bullish formation. The 50 MA around $22K could otherwise act as support in the meantime, though in recent weeks has remained unreliable.




With price attempting to instigate a trend reversal, the Daily chart is now looking more significant. Despite closing a candle above the 50 Day MA ($22.5K), price was swiftly rejected yesterday and unsurprisingly struggling to find support from this bearish trending moving average that instead has acted as resistance for now. As price additionally attempts to break-down below the 200 WMA, it's threatening to confirm it as resistance yet again this week. This means coming back down to volume support becomes more likely after a failed break-out, if $22K support level or the 50 Month MA is unable to hold in the short-term.



Despite a short-term correction looking more likely, the Weekly RSI still remains outside of oversold territory, so even correcting to support would likely close the week slightly bullish by confirming the end to the current capitulation - even if long-term price remains bearish. While this might not be the week for a strong close after a pump early in the week, it should still be a good set up for a break-out next week.

Price has broken through the $23K level and unquestionably looks strong today after breaking through resistance levels, even finding buyers sub $23K on shorter-term time-frames:



More significant to me now is the close above the bearish trending 50 Day MA, suggesting a re-test of the 200 Day MA comes next (currently priced at $35K but declining):



Better yet, neither the 4hr nor Daily RSI are currently oversold, but instead in bullish territory (>60), so there is definitely room for further upside. There could certainly be a quick push to $28K to $30K levels if the bullish momentum continues as volatility remains high, now the bear flag structure has been invalidated and price has made a significantly higher high, as well as highest price in over a month.

Based on the Daily chart, support for a quick pull-back could come around $22K (previous resistance level), or even now the 200 WMA ($22.7K) or 50 Month MA ($21.950). Unlike others, I don't think this is a bull trap or fake-out to the upside, instead I think the bull trap would appear around $30K levels (previous support). For anyone who's been waiting on the sidelines for a trend reversal, this looks like the one.

Despite further rejection from 200 WMA on the 4hr (dotted blue line), price remains surprisingly strong today and is back at the 50 Month MA (dotted purple) after a pull-back close to the mid-level of the bear flag structure. With price now finding buyers under $22K, another attempt to re-test $23K resistance levels looks likely. I still think a correction to around $20.5K support is likely, but for now the rally looks far from over:




Despite expecting price to correct further in the coming days to sub $21K, which could still be the case, price otherwise found support from $21.5K which is promising. It's therefore more than possible that price has already corrected enough within this structure with a sharper pull-back in order to break the resistance level, even if further rejection should still be anticipated based on strong resistance levels.

Zooming out to the daily chart, price is additionally testing the 50 Day MA at $22.9K (purple line) that price hasn't seen since $43K. Since the ATH and downtrend, $20K to $22K has become the highest volume trading area since $42.5K. So with with price remaining above it, there is a good chance of a bounce back to $30K levels, if price can break-out and close above this bearish trending moving average:



It's also worth remembering that while $30K previous support hasn't been tested as new resistance, neither has $38K, due to how aggressively price dropped since these prices. There is however considerable volume between $30K to $40K (most of the volume in the past 18 months by looks of it), so re-testing $38K previous support as new resistance won't be as easy as bouncing back to $30K.



With volatility at it's highest level in over a year, since May 2021 an aggressive move to the upside to $40K to $48K, similar to 2019, can't be ruled out at this stage. The 0.618 fib retracement level from $69K to $17.6K is currently at $49.5K, so a move back to this price as a "dead cat bounce within a bear market" would be the equivalent to 2019's $3.2K to $14K, if recent history repeats itself.

I normally don't do two posts in a day, but now price has reached the 200 Week MA ($22.7K), very close to the resistance trend-line, it seems relevant to post a small update:



This currently looks like the place for a pull-back based on the bear flag fractal after reaching $22,777 (target being $23K). There is already some selling pressure on smaller time-frames from the 200 WMA that notably has acted as resistance twice before. Meanwhile the 4hr RSI is struggling to maintain oversold conditions. Price otherwise pumped 9.5% today, so it'd be hardly surprising to see a correction at resistance:



The positive? Hope is far from lost. On the 4hr, the 50 MA has begun to rise (bullish), the 200 MA has flattened out (neutral) after the bull-cross. These both line up nicely with the volume point of control around $20,850 (circled above). Now that there have been three tests of support and three tests of resistance, it provides a good opportunity to break the bear flag if support can be found from $20.5K to $21K:



(This is purely hypothetical, but an example of how price is most likely to find support in order to invalidate the current bear flag structure, as opposed to immediately breaking through resistance)

Failing that, and returning to the support trend-line would increase the chance of support failing as it becomes weaker, as the Weekly RSI returns to oversold conditions. Likewise, another test of the resistance trend-line would increase the chance of it breaking as it becomes weaker. While short-term I see an imminent pull-back, the mid to long-term still provides opportunity for further upside.

(replies to recent posts below)

Despite the week closing in oversold territory again, price rallied shortly after. The fractal to $23K now looks eerily similar to the previous rally to resistance levels:



Price is otherwise back above the 50 Month MA, close to testing the 200 Week MA. While the target remains $23K based on the bear flag structure, price could well find resistance from these long-term MAs already as has been the case twice before with previous short-term rallies. Volume otherwise remains low despite today's pump, suggesting bulls are losing momentum in the short-term.


Despite the rejection last week from RSI leaving oversold condition, price immediately rallied to the upside. The weekly RSI is therefore now attempting to leave oversold conditions for a third consecutive week.



Last week's candle was however a doji-reversal candle, although somewhat unclear whether this implied a reversal from the long-term bearish trend, or reversal from the short-term bullish trend. Given the price following through to the upside today it now looks more like a bearish trend reversal, especially given the long-term time-frame the doji appeared on (hindsight's a beautiful thing):

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Haha thanks.


I can only imagine it'd be very bearish for Bitcoin. It'd effectively mean price capitulated to oversold levels, recovered to probably bearish/neutral territory, and then re-capitulated, similar to what happened with miners.

I wouldn't rule it out either by any means. If price get's back to $25K to $30K levels and is heavily rejected, followed by failing to find support from the 200 Week MA, this could very well happen.


Price is certainly "going against the grain" as it were, rallying after bearish CPI numbers, but otherwise since $19K levels I was anticipating a rally to $23K based on support/resistance levels and current fractal.


It certainly looks like price is currently absorbing bearish news very well right now, which is definitely a start to recovery, as opposed to dropping every-time something bad is announced. Also agree that challenges in Q4 may not have such a bearish effect, if price manages to stay about $17.5K until then. Even if not much higher, it'll show that Bitcoin is remaining resilient.


Thanks, I try my best. Mainly to emphasis what the indicators are suggesting, rather than outright predictions. Especially while Bitcoin remains in a neutral-ish trading range in the shorter-term


Sure, will consider it when I find some time. I only really use volume, RSI and moving averages as core indicators (the basics), but adding in some of the fundamental analysis indicators could be useful. Especially if collating together explanation from others of these indicators. A thread referencing many different user's explaining indicators would be quite useful I imagine.

It looks like (Price is going against speculation) but it will be amazing to see a difference in the price these days.
In my opinion, the price has absorbed all the effects of the expected news, and therefore even if economic challenges occur during the fourth quarter, we will not witness strong corrections.
The whole problem remains in the occurrence of unexpected changes in the economy.



I can hardly hide my admiration for the development in the posts from mere discussions to analysis using technical analysis tools, which is a good thing.

If you have some time, I hope that you will write your own topic^[1], which explains how to analyze technical analysis and choose the appropriate tools.

[1] https://bitcointalk.org/index.php?board=39.0

Checking in my current favourite thread in speculation, quite interesting developments over just the last few days, some unexpected rallies -- despite the worse-than-expected news -- leading us to this second consecutive attempt to pull away from the oversold currents.

Am only thinking now what it would mean, if it successfully leaves oversold territory only to return to it again, say, in the next few weeks as that schedule's packed full of expected bearish news (bearing in mind again, pricing in has already happened, but thinking in scenario of worst-than-expected news).

I'm not convinced that's usually the case with the RSI, regardless of time-frame, as 50 is merely part of the neutral level:

<30 Oversold
30-40 Bearish
40-60 Neutral
60-70 Bullish
>70 Overbought

It's more common that once the RSI turns bearish (<40) it get's oversold (<30). Likewise if it turns bullish (>60) it get's overbought (>70). But even this isn't that reliable.

As for Bitcoin's Monthly RSI, it has never been bearish, only neutral at worst like at the moment (41.66 lowest reading). It's not that Bitcoin is different, it's that it has never been in a long-term downtrend. In this context, long-term as in Monthly moving averages trending downwards and price below them. It could obviously happen, but without the RSI turning bearish, there's nothing to suggest that right now.



Generally speaking this is what makes the Monthly RSI for Bitcoin relatively useless while instead the Weekly RSI is much more reliable.