KEY POINTS

  • A cryptocurrency trader noted Bitcoin's three-day chart shows a bullish signal from Stochastic RSI
  • The last time Stoch RSI turned bullish, BTC went from $3,500 to near $10,500
  • Bulls are defending the $9,000 level, as shown by the recent price action

While Bitcoin traded sideways in the past seven days, a trade indicator that has accurately predicted past price rallies has again printed a bullish signal. 

The Stochastic RSI, or Stoch RSI is a popular indicator that displays whether a trading asset has been overbought or oversold. According to crypto trader Fractalwatch, the Stochastic RSI is clearly displaying the world’s first cryptocurrency is oversold. When plotted on a chart, one can clearly see that any crossover on oversold levels is almost always followed by price action. 

The MACD on the three-day chart is also about to crossover to signal a bullish trend.

When the Stochastic RSI last crossed over oversold levels, Bitcoin went on a rally from $3,700 on March 13 to near $10,500 on June 1. 

Fractalwatch, however, warned that the weekly charts still show Bitcoin on overbought levels, as far as the Stochastic RSI is concerned. The difference suggests that there are opportunities for a price increase in the near-short term.

On the one-day chart, Bitcoin briefly touched the $8,900 levels again but bulls tried defending to bring the price back to $9,000. The brief descent to $8,900 cost $10 million worth of liquidations on derivatives exchange Bitmex. 

A price at $9,000 seems to be holding for the world’s largest cryptocurrency but if it fails, technical indicators are showing immediate support at $8,700 and $8,600 levels. The previous support at $9,200 has become a resistance and if bulls break past that level, another resistance will be faced immediately at $9450 to $9,500. 

The rally that began from the March 12 crash seemed to be losing its steam, with $10,000 proving itself as a formidable resistance. But, while price remains stuck, fundamental indicators for Bitcoin are showing bullish signals. For example, a number of non-price metrics are showing positive signs, including the number of active and new addresses on the hourly and weekly charts as reported by Glassnode. This is supported by numerous price predictions, like the Stock-to-Flow model that predicts a $30,000 year-end price and Bloomberg’s own research that suggests Bitcoin will revisit its previous all-time-high levels this year.

bitcoin-2007769_1920 Bitcoin Photo: Bitcoin