May 27, 2024
Bitcoin's at $68,982, RSI Signals Potential Short-Term Gains
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Bitcoin’s at $68,982, RSI Signals Potential Short-Term Gains

Wednesday, April 10, 2024: Bitcoin Price is $68,982, experiencing fluctuations in its price, raising concerns among analysts about the potential conclusion of its macro bull run. The current price indicates a possible turning point in the market. Analysts are closely monitoring on-chain metrics, particularly the value days destroyed (VDD) multiple, which has historically predicted BTC price tops. This metric has recently reached a “rare” high, prompting discussions about whether Bitcoin has reached a peak.

On-Chain Metrics and Concerns

Analyst TXMC, known for the YouTube channel Alpha Beta Soup, has been analyzing the VDD multiple. TXMC highlighted a significant observation, noting a “rare 4.0 print” on the chart, which has historically signaled macro tops for BTC/USD. The VDD Multiple measures on-chain spending against historical averages to gauge market psychology and identify potential blow-off tops. TXMC’s analysis raises concerns about whether on-chain momentum has peaked, suggesting uncertainty in Bitcoin’s future price movements.

Bitcoin VDD multiple. Source: TXMC

In March, when the VDD multiple reached around 3.5, TXMC already expressed concerns about its overheated nature. However, a key difference between 2021 and 2024 is apparent. In 2021, BTC/USD had already doubled its prior all-time high of $20,000 when the VDD multiple spiked. In contrast, the current spike occurs while Bitcoin is still at its previous all-time high, adding complexity to the overall picture and contributing to the uncertainty surrounding Bitcoin’s trajectory.

Mixed Signals and Market Analysis

While on-chain metrics raise concerns, other market indicators offer a mixed perspective. Classic pointers like the relative strength index (RSI) have recently shown a “reset” to levels last observed in late January. The daily RSI, standing at 53 on April 10, suggests that Bitcoin is not in the traditional “overbought” zone, indicating potential room for further price movements. Traders note that a bounce is typically expected when Bitcoin’s daily RSI retests around ±50, signaling a strong bullish trend.

BTC/USD 1-day chart with RSI data. Source: TradingView

Additionally, analyses on shorter timeframes, such as the 4-hour RSI, provide promising signals. Traders like Alan Tardigrade have identified a hidden bullish divergence, indicating a possible uptrend continuation. Monthly timeframes also remain above 70, attracting attention from analysts like Plan B in anticipation of Bitcoin’s upcoming block subsidy halving.

Conclusion

BTC/USD chart with RSI data. Source: Alan Tardigrade/X

Bitcoin’s current market situation is characterized by a mix of signals, prompting analysts to closely monitor various metrics to assess its future trajectory. While concerns arise from on-chain metrics like the VDD multiple, other indicators such as the RSI offer cautious optimism. Traders and analysts alike continue to scrutinize market movements, looking for clues to navigate Bitcoin’s evolving landscape.

Photo by Karolina Grabowska

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