Bitcoin: Relative Strength Index

Hey everyone and thanks for jumping back Into the cryptoverse today we're going To talk about Bitcoin and we're going to Be discussing the relative strength Index or RSI if you guys like the Content make sure you subscribe to the Channel give the video a thumbs up and Also check out the sale on intothe Cryptoverse premium at intothe Cryptoverse Docomo strength index used by itself in My opinion is not the best idea but I do Think it can be used in Confluence with Other indicators to help provide some Insight into the Market there's this idea of you know if The RSI is above 70 it's overbought and If it's below 30 it's oversold now if You use the RSI the weekly RSI to just Simply buy Bitcoin every few years Whenever the weekly RSI goes below 30 You would actually be doing quite well Okay however the reverse is not Necessarily true in terms of going above 70 and you can see there's examples when When the RSI on the weekly goes above 70 And while it might pop back down below The 70 level it can stay overbought for Months quarters and sometimes even years Before durably going back down to the Lower part of that range between say 30 To 70 and so I want to talk a little a Little bit about where the weekly RSI is

Right now and and where has that lined Up in the context of History so if you Guys think back to earlier this year Back in March we talked about this idea Of a summer low right where basically You know Bitcoin tops out potentially One month before the having just like Eth topped out a local top again one Month before its merge and then it put In a couple of lower highs after that Before picking back up we talked about That idea about this summer lull and so It got me thinking now that you know It's here I mean bitcoin's below 60k Which I don't really think a lot of Analysts had on their bingo card for This year now that it's actually back Below 60k I was wondering where where is The weekly RSI and does it actually Correspond to where it was last year at This time we've also talked a little bit About other comparisons as well we've Made the comparison to 2013 and 2016 and 2019 and of course 2023 but I just want To show you where the weekly RSI is Right now so we're just going to draw a Line across the page and just simply Look at prior times when the weekly RSI Came down to this level now Coincidentally this is the level that The weekly RSI hit back in the summer of 2023 you can see that we got this move Down in early August Bitcoin then spent Several weeks in fact below its bull

Market support ban now back then I was Looking at this as a potential Comparison to 2019 because we also fell Below the bull market support band in Q3 Of that prehab year which is exactly the Same thing that's happened every Q3 of Every prehab year Bitcoin Falls below Its bull market support band if you Don't believe me again this is crypto Don't trust verify you can see that it Did happen last year Q3 of the having Year we saw Bitcoin drop below the 20we SMA so that ended up coming true but the Reason that we talked about that idea Was because it did the same thing in 2019 and it did the same thing in in 2015 in Q3 of the prehab year and then Also in Q3 of 2011 and so it seemed like This was you know this this pattern that Was just continuing to play out and so One of the ideas that we talked about Was going below the bull market support Ban like we did over here in 2019 Consolidating for a few Weeks and then going back up to the 20we Moving average you see that that's what Happened in 2019 now in 2019 Bitcoin got rejected by the 20we Ese in 2023 you you can see that it Actually got through but what's Interesting as it relates to the Relative strength index you can see that Not only was this the support level that

We had in 2023 which is where we are Right now it's also the support level That Bitcoin hit in 2019 when it fell in Q3 of the prehab Year and what's interesting is if you go Look at the bounce that Bitcoin had back Up to that bull market support band The 20we SMA 21 we EMA and you draw a line Across the screen at that at that sort Of rejection you can see that after Coming back down to this level bitcoin's Weekly RSI a couple a month or so later Moved back up to that same level that it Hit in 2019 you see that it was the same Level the main difference though was That in 2019 Bitcoin got rejected from That level and then went to a lower Weekly RSI in 2023 it did not get reject I mean it got temporarily rejected from That level but then it blasted through In Q4 of the prehab year so it basically Did the opposite of what happened in 2019 and after the after the summer low In the summer low of 2019 we followed it Up we extended that low through Q4 in 2023 we did not extend it and we ended Up getting a Q4 rally so so we find Ourselves at a very similar position Right where the weekly RSI has dropped Back down to around 45 or so now Coincidentally this is also Approximately where the weekly RSI was In the summer of 2021 right you can see That this is where it bounced around you

Know approximately for a couple of Months or so so we find ourselves in a Very similar position now remember when Bitcoin did drop in 2019 to this Level it then basically went sideways For about a month and then it Wicked Much lower it Wicked much lower you see That it it actually went all the way Down to around 7 $7,300 right so the First low that it hit was around 7,700 but then eventually it dropped a Little bit lower than that about another 6% drop from that level okay now lot of What we saw back then has been somewhat Tempered in this cycle for instance when We dropped below the bull market support Band in the summer of 2019 that was a 20% drop but in 2023 When we dropped Below it it was only a 10% drop right so About half and then this most recent Week when we dropped below it it was Also about a 10% drop so again it's not The same level of volatility as 2019 It's like a a tempered version of it at Least that's what we've seen so far so If Bitcoin hangs around in sort of in This region for a few weeks which again I don't know if it's going to if you Make the comparison to 2013 Bitcoin quickly got back above its 200 day moving average so far this time Bitcoin has been unable to get back Above up its 200 day ese that's not Doesn't mean it's going to and in fact

At some point I imagine that Bitcoin Will take a you know a a substantial Stab at at getting back above the 200 a SMA but this is where the weekly RSI is Right now right it's right around 45 which in 2019 provided some support after we put In a slightly lower low a few weeks Later bounced back up and then we Extended the drop into Q4 last year we Came to the same level we moved up Slight rejection and then we blasted off In Q4 So and by the way when this happened Over here in 2019 that was after the FED Cut rates right so the FED cut rates in July and then they continued to cut Rates later on that year and then Bitcoin ended up getting getting Rejected last Year you know what ended up happening is Higher for longer prevailed and what's Interesting for me is that I was always In the higher for longer Camp you know I Was one you know I I was definitely Calling for 5 and a half% Fed funds rate Way back in 2022 when a lot of people Thought that there was no way that was Going to happen and and I I definitely Was in the higher for longer camp but I Also was sort of Leaning last year that It was repeating 2019 when in fact you Can see what happened right now I don't Trade this stuff I got to be honest with

You guys I just I buy when Bitcoin is at Low risk levels and I I take profits When it's at high risk levels that's all I do that's all I do because I I found That over the long term you know I'd Rather I'd rather enjoy my life and not Stress about these day-to-day movements Uh so much in terms of my own portfolio So again if you're if you're looking for That sort of stuff I would say you just Got to come up with a plan stick to it And tune everything else out that's Probably going to be better than trying To time the market every single day but When you look at at this sort of chart Right you can see that there is at least Some repetitiveness of bitcoin's weekly RSI dropping back down into the mid-40s And sometimes it finds support and Sometimes it bounces and then loses that Support I think it will probably depend On what's going on over in the rest of The markets right what's going on in the Stock market what's going on sort of in The global economy but we find ourselves In a very similar position now we can Also look at this on a two-e time frame Because I actually think that the RS I Is a little bit more useful the longer The time frame that you're using now the First thing I will say is that when you First look at the twoe RSI there is a Bit of an uncomfortable feeling all Right and again guys I don't control the

Chart I really don't you know but you Can see that the two we RSI has tagged This upper trend line there's this Downward trend line that it's tagged Near major tops for Bitcoin right we we Tagged it in um in 2011 and in 2013 and then again later in 2013 we tagged it here in 2017 and then We also tagged it in January of 2021 but Then we know that Bitcoin went slightly Higher even after that but again there's No denying that you look at this and it It probably makes you feel somewhat Uncomfortable right um and that's why You know that's why I I say like it's a Good idea I think to stick to the risk Metrics because in 2019 the market got Somewhat heated right it got somewhat Heated back over Here and it allowed you know if you're Following a certain risk metric based on Just sort of looking at at different Things whether it's onchain or price it Was extended you know you could have Taken some off the table if you wanted And it would have saved you a lot um but Over the longer period you know who Really cares right I mean it dropped 70% But then of course we went up several 100% after that um so it's maybe neither Here nor there but my point here is that We have hit this trend line right we Have hit this trend line and it's better

To sort of face these things head on Rather than pretend like they're not Happening you know Um so I would I would keep an eye on This Because there's only been one cycle Where we tagged this trend line and then We tagged it again later on every other Cycle it was basically just one and done Like once we tagged the trend line we Didn't go back up and tag it after that At least not for a couple of years or at Least a few years right I mean in 2011 You can see from 2011 it took two years Right after tagging it um tagging it in November 2013 it took four years from December 2017 till here it took about Three years right and then and then January 2021 or so to to February 2024 That was 3 years as well so you can see That you don't often revisit it 6 months Later with the exception of 2013 so then That raises the question well where did It find support in 2013 where did the Two-e RSI find support and it actually Found support precisely at where we Currently are now I don't know if if It's going to hold this time or not I Really don't I just think that it is Notable I'll be honest I mean I I I Really I know a lot of people have have Sort of asked me about whether it's a Normal cycle a left translated Peak There's three options the way I see it

Right there's three options option one Is that it's a normal cycle with a peak And Q4 of the post having year that was What we saw the last three Cycles right 2013 2017 2012 Okay so that's option one it's a normal Cycle where you get a peak Q4 of the Post having Year which would mean you know this they This was in you know March of 2024 which Would mean potentially not seeing it tag The trend line again until maybe the end Of 2025 which is almost two years which Would be kind of similar to what we saw Back over here in 2011 where it tagged It in May of 2011 and then tagged it of March of 2013 right it' basically be the Same thing except You know shifted way over here so I Don't know if that's what's going to Happen but I am just pointing this out Right you know this is the level that There was we that the twoe RSI did in Fact find support but if it finds Support here and then goes straight back Up to the top top trend line and it Doesn't and that's it then that would Mean it could be a left translated Peak With a Peak at say the end of this year Right so Again it kind of depends on what happens Here right and you know and and also There there does exist a scenario where

It holds but it doesn't go back up to The top of the trend line right there's An example like 2016 2017 where it maybe Holds at these levels but it doesn't Really get that explosive move to the Upside until 2025 so I would keep an eye on this Level and this level is is around 56 or So on the two we RSI Now there is one sort of uncomfortable Thing about this and that is that you Know every time that the two-e RSI hit This trend line Bitcoin did get a pretty Large drop even in 2013 when it hit the Trend line while it hit it again later On technically speaking it still dropped Over 70% but it also bottom July 5th Which so far is when the local low is For the most recent J July 5th of 2024 but again you'll see that that is Is ultimately um what trans expired Every single time that Bitcoin hit that Trend line even though sometimes it did Go slightly up before then dropping that You know 70 to 80% or so so I don't Really know how I feel about this There's also an example of 2019 where you know you go up and then You don't hold support on this level and Then you go all the way back down as the Market gets somewhat worried about Growth in 2019 the market was worried About growth as as you know bankruptcies Were starting to to turn back up the FED

Cut rates to get ahead of that and there Was this sort of the scare in the Economy and then we also had an inverted Yield curve back then too uh Coincidentally right I mean I don't Think a lot of people kind of forget About that but we had an inverted yield Curve back in 2019 as well and so we did Have a growth scare and and Bitcoin did Not hold it but then it picked back up The following year so I think a lot of The characteristics of this Market cycle For Bitcoin is going to really be depend On what happens at this level and if you Go back and look at just the weekly RSI Right if you go back and look at the Weekly RSI you can remember I mean these These lines that I drew were actually Based on the twoe but you can remember That this is where the the the weekly RSI held support in 2023 but it's also Where the weekly held support the weekly RSI held support in 2019 right if you look again if you look At 2019 this is where it held support And while it held support it still put In a slightly lower low about 3 weeks Later and furthermore it got rejected by The bullmark sport Ben when it did test It right it it it went back up to It but it just it simply got Rejected now if you look at the timeline On this how long did it take to test it From when we fell below it to the rally

Back up above the 20we ese on a weekly Time frame or on a wick I mean took About four weeks if you look at 2023 from when we fell below it we Actually got back up to the 20we ese two Weeks later but it was just a wick right We didn't if we didn't see a weekly Close up there in order to get back up There with a weekly close it took about Six weeks right so this time around if You look at at what what's happened with Bitcoin so far right I mean it just fell Below it and so we're currently just in The first week following that so you Know four weeks out would put you at the Very end of July 6 weeks out would put You in sort of mid August or so but I Think that this is going to be a really Important spot now of course their Narrative now that everyone's talking About is the is the uh you know the German government selling Bitcoin and What I think is is always is always Interesting is that like you know no Matter what price does people will seek Out a narrative to sort of rationalize Right to sort of rationalize I did I Remember a few weeks ago you know we Were talking about the idea of a summer Lull I actually was talking about it in Late April and I said look guys I think We're going to get a summer lull but Normally you get a rally in May first Before it actually arrives and then you

Kind of accept that it's happening and Despite saying that we got the rally Everyone was freaking out and then we Just dropped like we always do into the Summer um so you have to be careful and Then now that it's happened of course Everyone's sort of racing to figure out Why is it happening right and now of Course they're blaming it on on the ger German government for selling Bitcoin But I do think that that maybe the Market is quite a bit bigger than a lot Of Market participants give it credit For um and So I mean I'll just leave it there right I'll leave it there and I I also think That it's fine to to be wrong about Things and I mean I've been wrong about Things all the time um it's kind of one Of those things that you just sort of Have to accept if if you're in this Industry if you're trying to make if You're trying to talk about financial Markets I mean you're just going to be Wrong a lot um but I will say that this Is this is going to be sort of a Critical level for Bitcoin over the next Couple of months or so at you know as it Looks at the weekly RSI now if you Remember when you look at the two-e RSI If you look at the twoe RSI how we said It might make it might lead to some Level of discomfort when look at that Especially if there's not another move

Back up but where there might be some uh You know return to comfort if you go Look at the monthly RSI you can see that It's actually nowhere Near that channel right that downward That downward sloping trend line right It's nowhere near it um in terms of but But again sort of the counter point is That the last time it hit it wasn't Until the post having year and the time Before that was in in the post having Year and the time before that was both In the post having years this one over Here of course was not in a post having Year it was a preh having year that was When Bitcoin first launched So I keep looking at this right I mean Again it's like a puzzle right it's like A puzzle and I Wonder is it going to just go up here by The end of the year and then sort of the Left translated Peak comes to Fruition Or is is it going to pull a 2019 on us And just kind of fade for a little bit Longer than people think it's going To because in 2019 I mean you can see That it it it had a really nice run but Then it the weekly or the monthly RSI Then faded from June of 2019 until March Right so coming up here to the high it Dropped for about 9 months so if it were To do that here about 9 months would Actually put it in December of

2024 so I wonder you know if it's going To play out like 2019 you would expect It to at some point retest the bullmark Sport ban um and if it gets rejected and You get confirmation that it's kind of 2019 on repeat then you would look Towards maybe the end of the year or say Early next year for Bitcoin to sort of To sort of pick back up but if on the Other hand the weekly RSI and the twoe RSI sort of hold the RSI hold at these Levels and we just go back up in Q4 then I do think there's more evidence for That left translated Peak View but I I do think this is is really Interesting and I also you know I've Talked a lot about this we we talked About this a few months ago I actually Was looking at some tweets on this Earlier but there there's a pattern here Right I mean you know you had a green And then you had a red and then a green And then two Reds right same thing green Red a green and then two Reds so it it Looks like a similar pattern so far My guess is that sometime in August right sometime next month I guess It could happen later this month but you Know I mean the market does tend to take Its time sometimes um my guess is Perhaps sometime in August you'll see it Back test the 20 the bullmark work in Right it doesn't mean you can't Wick up There between now and then but I could

See that happening right I could see us Trying you know doing something like That um and then that's where we figure Out what this next Q4 is going to be Made of because in last year Q4 we saw Just another acceleration to the upside But in Q4 2019 it just continued the Summer lull and then we sort of had the The pandemic recession scare before we Before QE turned on the fascinating Thing about this for me is that we've Talked a lot about about Bitcoin Dominance and and how that's going to Play out and you know my view as I've Said before I think dominance is Probably going to top in the second half Of 2024 Um but the reason I think it's going to Top is because I do think we're going to Get interest rate Cuts later this year And I think we're going to PIV it back To QE probably maybe in 2025 and and Maybe even later this year but you know I I would say more than likely by Sometime in 2025 and so that would then lead to the Uh you know to this idea of dominance Actually going down but in the meantime What we've seen happen with all why am I Going down this I I always make the Video about this this is about the RSI I Should stick to that um so let's just Talk I mean again you know that's the RSI and if we if we pull up by the way

The um so we have the the the Monthly Which you know all things considered you Would think that it it could Theoretically run up higher later on This cycle um it actually does seem to Be at at you know at this moving average Right here let me see which moving Average that is um so this is the um an RSI based ma guess on the 14 yeah just The 14 um so you can see that it's Actually just below that which is Actually where it went in 2013 right but in 2019 it got below it Got right back above and then of course It collapsed as the economy really Started to slow down with the um with The pandemic but I would look at that You know that would still suggest There's more room to theoretically run In the future although the last three Times that it did it it wasn't until the Post having year so you know are we Getting ahead of ourselves by thinking It has to happen now maybe that's the Monthly the two We looks a little scary right I mean it Looks a little scary if we're being Honest Um but you know I mean the reality is is That eventually we'll hit it again more Than likely you know whether it's this Year next year or if the other option by The way I said the first two options

Right option one is that the peak is When it normally is in the postt year Second option you get a left translated Peak in maybe Q4 this year third option You have a left translated Peak where The peak's already in you know and there Are examples in history where where Where that has happened in say like the Stock market where you get a low in the The the the midterm year you rally on up And then you top out sometime in the Election year and you know so there is a Chance that I mean actually you know the Dotc crash started in March Um but I think the main evidence sort of Against that is that well I mean you Know the the S&P has continued higher Well past March now Bitcoin hasn't just Yet uh but the S&P has and so we do know That the S&P did find a local top in July of last year just before the 10-year yield ran again and the 10e Yield ended up topping in October so That might be the next risk to the stock Market is if the the long of the curve Starts to move back up um but yeah I Mean like the the monthly RSI for Bitcoin it looks like there Could still be room sometime later on This cycle the two we you know it seems Like it's it's cooled off a lot after After tagging the top of this trend Line anyone would probably point out That every time you hit this trend line

Bitcoin had a fairly substantial drop Following that trend line but you could Also point out that when we hit this Level after trap tagging in 2013 that's Where we found Support on the weekly We're basically at the same level that We were at in both 2019 and 2023 so if you look at this right here Right same level and this is what got me In trouble last year is you know I was Looking at this level here from last Year and saying all right well you know There's a decent chance we're just going To go back up to the bull market sport Ban get Rejected right get rejected And then see the weekly RS side then go Below it and it and it even went up Again it I mean it looked so close to it Right it really did it went right back Up to that level saw a temporary Rejection and then we just blasted Through it in Q4 So weekly looks really similar to 2023 but also looks similar to 2019 I would say the main difference Between Now I'm going to end up talking about it Anyways even though I tried not to I try Really tried not to you have to give me Credit for that but we're going to we're

Going to talk about It all Bitcoin pairs right that's one of The one of the differences is that you Know in 2023 all Bitcoin pairs had just sort of Gotten down into this range the same Range that they sort of reached by September of 2018 and then ultimately They fell through in the summer of the Prehab year So last time that Bitcoin ended up Bouncing back up it was when all Bitcoin Pairs first got down to this level now Think my light is flickering Now we've been we've been at these Levels for about a year now and all Bitcoin pairs are really starting to Struggle to stay above this 04 level I Mean right now they're at 04 but you Know it's sort of like this 04 level has Been sort of a fud level for a lot of People that say that it's never going to Happen and now we're now you get rallies Back up to point for and people are Getting excited but you know I would say You look at the 8we SMA on this and There's a decent chance the 8we SMA is Guiding all Bitcoin pairs down so that's What I would keep an eye on you know do All Bitcoin pairs break down like 2019 Or do they hold and do something like The like we saw in in 2023 so that's Where we are right now I also think just Because we have it up if you look at the

Weekly RSI on all Bitcoin pairs you can See that there was this level of s sort Of support that was you know we we had a Low we had a higher low we had a higher Low but now you're essentially you know You can see that basically all Bitcoin Pairs sort of broke through that and and Maybe they're trying to back test that Trend line I don't know I think it's Extremely dubious to draw trend lines on On that sort of stuff but I do think That you know in 2019 we we saw Something very similar right we saw all Bitcoin pairs basically climb this thing They dropped ow it we got a rally it Fell short and then we we actually saw All Bitcoin pairs sell off in July a and August and September of 2019 and then They went they finally went into that Oversold region right so and basically You could even connect the dots right This dot to that one to that one where They finally bottomed um and so I you Know I just wonder if it's if something Like that is is ultimately going to play Out again where all Bitcoin pairs sort Of fade and a lot of the reason for that Is just you know I think a lot of people Have been surprised by how long this Bitcoin dominance rally has gone on for Uh but I I also think the reason is Because a lot of people didn't really Believe the FED right higher for longer You know know a lot of people didn't

Really believe them and and they meant What they said and so the higher risk Assets just keep on bleeding to the Lower risk Assets so that's where we stand with Bitcoin and the relative strength index Again my sort of recommendation on Things like the RSI is that it's Probably better to figure out to if You're gonna use the RSI for anything It you're probably better off using it To figure out when to buy than when to Sell right because again if you only Ever use the RSI to say all right Whenever the weekly RSI goes below 30 It's time to DCA right if you did that You'd be fine if on the other hand you Sold every time I went above 70 then That effectively means you are you know You're selling Bitcoin here and Here and here right you can see the Issue with it right I mean like it that That's the issue if you're using the Weekly RSI to try to figure out when you When when you should sell right buying On the other hand tends to be a bit of a Better you know better better um track Record selling eh not so much sometimes It's okay like 2019 but other times you Know if you once you hit these levels It's really hard to know how long it'll Stay up in this level and again it can Stay overbought for for months before it Comes back down so that's where we stand

Hopefully this has been useful in terms Of figuring out where we are in the Market cycle with Bitcoin and the weekly RSI the daily or the the weekly the two We and the monthly the only other thing I guess we didn't look at that might be Interesting is the daily I don't even Know I imagine it's oversold right now No it's not but it's it's I mean it came Really close right I mean so you had a Low here in it was oversold right um Back in June of 20 June 24th and then a Higher low I so I guess it's forming Some type of Divergence there right Where you're you're again I don't spend A lot of time thinking about this but You have higher lows on the RSI and Lower lows on price so I think I think The experts would call that um uh Bullish Divergence I think I think but Again like the issue is that you know Just because you're oversold doesn't Mean price can't go lower and I mean I Remember people saying that look the RSI Is oversold therefore 60k was the bottom And now we're sitting at 56 K right and The RSI is is higher it's the same damn I'm going to talk about it it's the same Thing as Bitcoin dominance it's the same Thing like you know I've had so many People tell me that you know the the Weekly RSI is way up here and that it it It it it means that it's going to go Down but then it never really does any

We'll go ahead and wrap it up there guys Thank you for tuning in subscribe and I'll see you guys next time bye


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