Bitcoin: Relative Strength Index

Hey everyone and thanks for jumping back Into the cryptiverse today we're going To talk about Bitcoin and we're going to Be looking at 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 Check out into the cryptaverse premium At into the let's go Ahead and jump in so the relative Strength index is something we've talked About a few times on the channel and one Of the things that I like about it is it Does give you a good idea of whether an Asset is overbought or oversold however There are some implications of this as Assets can remain overbought or oversold For very long periods of time for Actually before they actually reverse Direction okay so we do need to remember That what we're going to do in this Video is we're going to look at the Relative strength index on primarily I Think three different time frames so on The Daily time frame on the weekly time Frame and of course on the monthly time Frame with the most recent surge in the Price of Bitcoin back above its 200-day Moving average of course it is someone Wide useful to sort of look at where Does the daily RSI stand just because We've we've moved up relatively quickly From around 16k to just over twenty one Thousand dollars and the way you think

About the RSI or the way I think a lot Of people think about it is if it's Below 30 it's technically oversold and If it's above 70 then it's technically Overbought but again the you know the Sort of the definitions of being Overbought or oversold they can remain Like that for a very long period of time The first thing I think it's worthwhile To look at is when was the last time the RSI on The Daily time frame was actually At this level you'll know that the daily RSI is around 88 to 89. if you were to Take a line here and go all the way Across the last time the daily RSI hit This level was back in January of 2021. Now ultimately we did go higher but After hitting this level we actually had A short-term retracement to the tune of 30 percent but this is where separating Out time time frames of course can make A pretty big a pretty big deal right it Can make a big deal or it can be a big Deal because on daily time frames it Doesn't necessarily say the same thing As on a weekly time frame or in a Monthly time frame so on a daily time Frame Bitcoin is technically overbought The last time it was this high was back In January of 2021 before that though if You were to continue to take this back What you'll notice is we also came to These levels back in 2019 as well and And you know we moved up and then we

Went sideways for about a month and by Going sideways it allowed the RSI to Actually cool off okay Bitcoin hasn't Really gone sideways at this point right It's just simply been going up so good Chance at some point in the coming weeks You're going to see the daily RSI come Come down in a material fashion whether The price goes down or whether we get to Some level and go sideways of course is Is going to affect the degree the degree At which it goes down but if you Continue to go back further in time you Can see that there are a few times in History where the daily RSI has gone Above even where it currently is like Back in December of 2017 at the blow off Top it was all the way at 94. okay and Of course you know Bitcoin has various It has gone through various phases where The daily RSI will hit similar levels Um here's another one back in November Of 2015. right pretty pretty Um similar you know parabolic move here In the short term daily RSI we did Eventually get a pullback but again the Daily RSI doesn't really tell you the General direction of the trend right it Just shows you what has happened in the Very short term and I mean it can it can Help show you probably what you already Know right and that's Bitcoin is is Um you know getting to these overbought Conditions doesn't mean I can't stay

That that way for a little bit longer Though the next thing to look at though Is on a longer time frame because you Know this channel we more more so care About longer time frames I'm not really That interested in in shorter term time Frames if you look at the weekly this is I think a more interesting way to look At the RSI because right because we've Seen you know pretty cyclical Behavior Right fairly cyclical Behavior where at Major tops you'll see the the weekly RSI At levels you know around 90 or so but Then at bottoms or near bottoms you'll See it much lower now the RSI can be Very misinterpreted okay very it can be Misinterpreted quite easily in fact and One of the ways that that is possible And this was actually something we Warned about in in the summer If you remember uh back in you know back In the summer a lot of people were were Calling June the bottom right because The RSI was all the way down here at Very similar levels if not lower than Where it was back in you know 2018 and 2014 as well this was back in June and This was one of the reasons one of the Many reasons that you know a lot of People looked at this and said that June Was the bottom right because the weekly RSI was at fairly oversold conditions Now that's not the only reason there Were many other reasons that that you

You could have given but this was one of The primary reasons one of the reasons I Maybe not primary was one of the reasons That that people might look to this and Said well we're at levels that we Haven't seen since you know the bear Market bottom of December 2018 the bear Market bottom of of January 2015 Therefore maybe it's the bottom the Problem is that when you're looking at The RSI the RSI can actually go higher While price can go lower right and we Talked about how there was a very Similar type of move over here in 2018 Where everyone thought that June was the Bottom but in reality it wasn't right we Ended up going down and capitulating in December of 2018 this was a mistake that I made back then in 2018 was that Thinking that 6K was the bottom right I Thought 6K was the bottom and it was and We ended up capitulating in November December time frame and that was sort of The warning we put out again throughout The summer while everyone was you know Super excited about about that rally it Was like well there's probably going to Be another capitulation at the very Least at least one more capitulation Um and it it did in fact end up Occurring uh in November so the other Thing that I I think we should look at Here on the weekly Is you'll notice that and maybe I can

Um Zoom this in a little bit one of the Things you'll notice is that the price Went down But the RSI Why not right so the price went down the RSI went up so the price put in a low And a lower low the RSI put in a high And a higher high So I think a lot of people learned this Lesson the hard way right just because The RSI was at a low level did not mean That June was the bottom right We went lower even though the weekly RSI Was actually higher This is an important thing that I I Think you know you need to recognize About indicators like the relative Strength index because you could even Later on you could get another higher High but it doesn't necessarily reflect That the price will be a higher low I Mean it could but it doesn't always Reflect that and so this is something That I you know you you really have to Watch out for in these bear markets as You'll see sometimes these patterns of a Low and then a higher low but it does Not always does not always reflect the Same thing on the price chart and again I do think many people sort of learned This lesson the hard way it was only Only a few months ago that we were Calling for a November capitulation and We in fact got it RSI didn't put in a

Lower low right it just simply didn't Did not put in a lower low despite the Fact the price did now the last time Frame that I want to look at is probably The most important time frame and that's The monthly okay Now the monthly time frame is is you Know probably more useful than any of The others right probably more useful Than any of the others because it more So shows much longer Trends in the Market right so I mean same type of same Type of deal right Mania phases Um that pretty much call The Top Right so if you look at where the RSI on The monthly gets to above 90 right top Top and then again over here in 2017 There was also sort of like a false one That happened just before it and then Again here in March of 2021 you had yet Another top indicating that the market Was really overheated now you can also Look at it at the bottom into the Spectrum as well and what I've noticed And what we've talked about is that the Bottom here on the monthly RSI Historically had bottomed at around that 44 to 45 level But this time it went lower right this Time it went lower and this was another Reason you know you could have looked at In June to say that that was the bottom Because it sort of matched up with what We had previously seen but when you look

At the price chart and compared it to The last cycle it said something else Right it said look as much as people Want November or as much as people want June to be the bottom history shows us That we could easily go down at the end Of the year and we did and what happened Right the monthly RSI put in a lower low So the weekly RSI put in a higher low The monthly RSI put in a lower low So despite The night the very nice move by Bitcoin That we will not you know I'm not it's Not an understatement right I mean it's A very nice move uh by Bitcoin from all The way down from 15K back up to 21 000 Note that the monthly RSI in November Went lower than where it was in June Okay now If you zoom in here You'll see that the monthly RSI is back Up to around 44 to 45. okay now what I Want to do is draw a line across where It currently is So where it currently is sits just above This low and it sits basically at the Same level as that one Bitcoin still has something to prove Here right it still needs to actually Close above these levels and continue Higher before it's actually going to Show any compelling evidence here on the Monthly time frame note that in 2015 the Monthly RSI basically hugged the lows

For two-thirds of the year or Three-fourths of the year right until September the month the RSI didn't Really go anywhere In 2019 we were only here for a few Months and what's interesting this time Is that despite this move up back to Twenty one thousand dollars we're only At the levels we're just above the Levels that we were at in December 2018. So The thing that I think we have to look Out for is can can Bitcoin can the Monthly RSI actually get above These levels right that it was at over Here and then over here I know this was also another trend line That people looked at right if you sort Of connect this slightly downtrend line We ended up going below it right I mean I know hope people are somewhat hopeful But we did in fact go below it but if You look at as sort of this trend line You really want to see Bitcoin get back Above here before you can really start To make a a more compelling case that The Um you know the recoveries is well Underway so still some short-term Resistance here on the monthly time Frame so what do we know right on the Daily time frame bitcoin's fairly Overall right I mean it's at again it's At like what 90 or 88

88 to 89. so on The Daily time frame Fairly overbought conditions on the Weekly time frame It's not really overbought right it's Only a 52 or so so not really overbought Conditions on the weekly time frame on The Daily time frame yes on the weekly Time frame pretty pretty um in the Middle right so I write in the middle Higher lows on the weekly RSI but lower High or lower lows on the Bitcoin price And then on the monthly time frame Lower lows from June to November and Lower lows on the price so short term Right everyone's everyone's happy Everyone's you know celebrating this Recent Bitcoin pump Um mid-term on the weekly right we're Sort of in between on the monthly we Still have a lot to prove right because We've we've seen this Rodeo before right Where Bitcoin goes up but There's been several of them so far they Have not continued to resolve to the Upside we'll see what you know we'll see What transpires over here one thing I Wanted to address is sort of the Question of well how does all of this Fit in with a potential recession like Are we going to get a recession or not And how would that affect the most Recent local low in November for Bitcoin Like is it a major bottom or is it not I Think that the best way to think about

This from a cyclical point of view so Purely from a cyclical point of view Where Bitcoin has seen major bottoms You Could argue that there is at least some Evidence to suggest that's a significant Level right the main risk I think that Bitcoin has is just whether we get a Recession or not right so if Bitcoin Avoids a recession and that makes this a Little bit more of an important level if Bitcoin gets or if we do get arrested so If we don't get a recession this is a More important level if we do get a Recession then you know it will really Call into question that level so again It's all about whether you think we're Heading towards a recession or not do You think the United States can avoid it And you know we're probably going to Find out this year right we've looked at The yield curve not to deviate Too Much From the topic of the of this video We've looked at the yield curve many Times with the inversion of the yield Curve and you'll see the inversion of it But it can take a long time to resolve Right I mean you know if if you're if You're convinced that a recession is Coming which again there is significant Amounts of evidence to suggest that it Could It doesn't mean it comes tomorrow right The inversion of the of the two-year and The yeah the two year and the ten year

Happened in July History shows us that it takes 12 to 18 Months oftentimes before you get a Recession from the inversion of the of Those two 12 to 18 months it hasn't even Been what it's been like seven months so Far so yeah we could have a recession It probably isn't tomorrow right like The recession Um you know the the yield curve is not Going to uninvert tomorrow right it's Not these things take a long period of Time so while you could inevitably see That play out it could it could take a While right it so sort of like what we Had in um in 2020 you know there was a Um there was a a very brief recession Over here where Bitcoin sort of retested The lows and and put in a slightly Higher low in fact but it was a long Time later right I mean it was from December 2018 until March 2020. so it Was more than a year later so if you're Talking about you know the inversion of The two year and the tenure and I'll do A more dedicated video on this Um I mean that could be as early as as This summer but it could also be as late As late this year early next year so Just something to keep in mind hopefully This video has been useful to you again Give the video a thumbs up if you like It make sure you subscribe to the Channel thank you guys for tuning in

I'll see you guys next time bye


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