Bitcoin (BTC) has returned to the $28,400 level after a failed breakout above $30,000, resulting in a high number of liquidations for both long and short positions.
In addition, the recent one fake news surrounding the approval of Blackrock’s spot Bitcoin Exchange-Traded Fund (ETF) by the US Securities and Exchange Commission has disrupted the uptrend and introduced new bearish indicators to the Bitcoin market.
RSI screams for sales
Renowned trader and crypto analyst Ali Martinez suggests selling BTC based on the 4-hour chart Relative Strength Index (RSI) indicator. His simple trading strategy advises selling BTC when the RSI rises above 74.21 and buying it when the RSI falls below 30.35.
As seen in the chart above, BTC’s RSI is at the 74 level, which is remarkably high considering that on October 16, after the spread of the fake news on various platforms including X (formerly Twitter), the RSI even reached 82.83. .
Although this indicator seems simple, it has proven to be effective on the 4-hour chart of BTC. For example, on October 1, Bitcoin peaked at $28,500, but after the RSI climbed above 80, the leading cryptocurrency quickly fell to $27,150 within hours.
While the effectiveness of these indicators is not always guaranteed, the combination of the recent false pump, the continued pullback visible across all BTC charts, the lack of bullish momentum, and the prevailing market sentiment of fear, doubt and uncertainty could create the perfect storm for BTC to retest the lower support levels before potentially embarking on another upward move.
Bitcoin Pre-Halving Retracements are ringing the alarm bells
To further support Ali Martinez’s bearish thesis, renowned crypto analyst Rekt Capital recently shed light on Bitcoin’s historical retracements approximately 180 days earlier. halving of events.
According to According to Rekt, Bitcoin experienced a retracement of -25% in 2015/2016, about 180 days before the halving. Similarly, in 2019, around the same time frame before the halving, Bitcoin fell -38%.
While Rekt Capital identifies as a macro bull, it recognizes that historical data favors bearish trends before halving events.
This observation raises the question of whether history will repeat itself itself in 2023. Will Bitcoin witness a significant retracement similar to previous cycles, or will market dynamics in 2023 deviate from historical patterns?
What is certain is that while the crypto community eagerly awaits the halving in 2023, uncertainty looms over Bitcoin’s price behavior leading up to the event.
Given the current market conditions BTC trades at $28,400, indicating a profitable position across all time frames. Over the past 24 hours, Bitcoin has experienced a modest increase of 1%.
Over the seven-, fourteen-, and thirty-day periods, BTC has posted gains of 3.7%, 4%, and 7%, respectively, despite the earlier bearish factors. The sustainability of Bitcoin’s current price level remains uncertain as it remains to be seen whether it will weather potential retracements anytime soon.
Featured image from Shutterstock, chart from TradingView.com