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Overbought Or Ready To Rip? Bitcoin Daily RSI Reaches Explosive Levels

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Overbought Or Ready To Rip? Bitcoin Daily RSI Reaches Explosive Levels

Bitcoin price is showing signs of getting overheated on daily timeframes using the Relative Strength Index (RSI). The tool, typically used to spot overbought conditions, is at one of its highest levels ever historically.

However, an elevated RSI reading in BTCUSD is deceiving, leading to some of the most dramatic moves ever on the cryptocurrency’s price chart. Here is a closer look at what happens when Bitcoin price action gets this hot.

Bitcoin RSI Reaches Highest Level Since Early 2021

After breaching above $20,000, onlookers are wondering if a possible bottom is in for Bitcoin, but remain skeptical after such a long, arduous downtrend.

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Bears have good reason to expect a pullback: Bitcoin has become extremely overbought according to the Relative Strength Index. In fact, the top cryptocurrency is more overbought than at any other point during the entire bear trend.

Bulls, on the other hand, could be ready to push prices higher. In the past, the RSI has only reached such an elevated level – a reading of 90 or above – during the most intense bullish movements of recent years.

Elevated RSI tends to only happen during bull markets | BTCUSD on TradingView.com

Why Crypto Could Be Ready To Rip Higher Once Again

Bearish investors and traders might be quick to claim that this time is different, considering the Fed raising interest rates, the backdrop of war and recession, and more. But bulls have much more data on their side, and momentum at their backs.

In fact, bulls have the entire history of BTCUSD price action to prove that the Relative Strength Index reaching such highs have led to the greatest sustained gains in crypto.

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Bull markets are characterized by recurring phases of extreme RSI readings. Bull markets also end at such extremes, but typically only after at least a series of three waves. Bear market peaks, throughout the entire lifetime of BTCUSD price action, always fail to reach such highly elevated RSI.

The Relative Strength Index was created by developed by J. Welles Wilder – who also developed the Parabolic SAR, Average Directional Index, and Average True. The technical tool measures the speed of the change of price movements.

Although readings above 70 and below 30 typically represent overbought or oversold conditions, a reading of 90 only occurs with an extremely fast and strong move. Such fast and strong moves tend to appear more often in a bull market than a bear market.

Cryptocurrencies can remain notoriously overbought during periods of FOMO. Is that exactly what we’ve seen in Bitcoin recently? And will the number one cryptocurrency by market cap rip higher, or ultimately see a rejection here due to such overbought conditions?

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Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice. Featured image from iStockPhoto, Charts from TradingView.com

Tony Spilotro

I’m Tony Spilotro. Behind the pseudonym, I’m a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck – literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn’t yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can’t yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter at @tonyspilotroBTC and feel free to drop me a line if you would like to work together.

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Algorand TVL Hits $177 Million As Altcoin Rally Continues – Can ALGO Sustain This Push?

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Algorand TVL Hits $177 Million As Altcoin Rally Continues – Can ALGO Sustain This Push?

Algorand is one of the fastest growing crypto in terms of gains. According to CoinGecko, the token has appreciated by 30% in the last two weeks. With the broader crypto market rallying as Bitcoin breaks its crucial $21,000 resistance, ALGO is set to gain more in the next few days. 

The Total Value Locked department is where the ecosystem gained the most. According to DeFiLlama, Algorand’s TVL yesterday hit $177 million in value. This uptick in TVL is a bullish indicator that the ecosystem still has the momentum to reach new milestones. 

However, the token might be on shaky ground as the bears test its current support at $0.2275. 

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Image: Forkast

Algorand Developments On-Chain

Algorand’s G6 governance commitment period ended yesterday, January 16. According to Algorand blockchain explorer, AlgoExplorer, more than 4.1 billion ALGO is staked by over 31,763 governors. 

Image: DeFiLlama

The ecosystem would pay back the governors with an annual return rate of 6.52%. This way of governance makes the Algorand ecosystem stay true to the tenets of decentralized finance. To add to this bullishness, the ecosystem also processed its 1 billionth transaction. 

With the ecosystem able to handle more than 2,881 swaps on-chain, Algorand is expected to continue growing in popularity.

Did you know Algorand can handle over 10x the number of AMM swaps per second relative to #solana #Avalanche #polygon #bsc #celo #ethereum? $sol $matic $algo $bsc $eth 👇 pic.twitter.com/7hBmduanfM

— Axetrax (@Axetrax22) January 14, 2023

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Can ALGO Continue Its Climb? 

The token is currently trading at $0.2329, a nearly 1% decrease from yesterday’s $0.2341 price. The rejection at $0.2418 would delay ALGO’s recovery. With the token’s support at $0.2365 broken, ALGO investors should be able to buy the current dip in price as analysts are still bullish with the token’s price movement. 

With improving macro trends, investors and traders are more likely to enter riskier assets like cryptocurrencies. Not to mention that Bitcoin, the face of the crypto market, has broken through crucial resistance at $21k. With ALGO’s high correlation to BTC, ALGO can ride Bitcoin’s rally to reach higher highs. 

Investors and traders should watch the current market situation of ALGO as the token’s current price position as the ecosystem has been having trouble maintaining a social presence. 

ALGO total market cap at $1.6 billion on the daily chart | Chart: TradingView.com

ALGO holders should also watch Bitcoin’s price rise in the next few days or weeks. The $21k resistance break wiped out the lost ground following the collapse of FTX. If BTC continues its bullish recovery in the next few weeks or days, ALGO can ride the upward wave. 

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But with the token facing a slight correction, this bullish break might be delayed as the bears retest the current support at $0.2275. If the bears win the struggle, the token’s recovery will inevitably be delayed.

Featured image from ThoughtCo

Christian Encila

Freelance writing is Christian’s other cup of tea. When not on his computer, he unwinds with a bottle of beer and laughs with his son over cartoons. Other than that, he’s just like everybody else who wants to be happy with their life.

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Solana Up 13% Since Yesterday, A Sign Of Brighter Things to Come?

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Solana Up 13% Since Yesterday, A Sign Of Brighter Things to Come?

The touted “Ethereum killer” Solana has been on the down-low since its association with the collapsed exchange FTX. However, it seems as though 2023 has new plans for the struggling ecosystem with its native token SOL up by 13% based on CoinGecko figures, Tuesday.

This huge uptick in price led to SOL reclaiming double digits after dipping as long as $7.96 back in December 29. 

A Breath Of Fresh Air For Solana

After the ecosystem lost most of its value last year, this price pump is a breath of fresh air for investors and holders of SOL. Even though the bears left their mark on investor sentiment on SOL, some are still bullish for a possible reversal

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This, however, is not surprising. Solana has been taking its time in distancing itself from being known as one of the “Sam coins”, with Messari releasing a detailed overview about the ecosystem on December 15. 

Solana’s token isn’t the only one that was hit hard, however. Solana’s NFT market has suffered through this whole debacle as DeGods and y00ts, two of the most prominent collections on-chain, decided to migrate to Polygon. 

Solana NFTs sure don’t look dead pic.twitter.com/UXNqJ6wRyi

— Mamba 🐍 (@Mamba248x) December 31, 2022

However, this has not stopped Solana from still maintaining its top 2 spot in terms of NFT sales volume. Transactions also support a bullish future for its native token as it still retains its top 1 spot in transaction volume according to Delphi Digital, an institutional grade research platform. 

With Solana leading in active addresses against competitors as well, we can definitely see why the SOL has just shot straight up. 

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Macro And FUD, Not A Great Mix 

Even though the current bullishness is good news, investors and traders shouldn’t disregard the power of macroeconomics on crypto markets. With SOL still being highly correlated with Bitcoin, we can see SOL’s price move somewhat closely tied to BTC’s price movement. 

SOL total market cap at $4.3 billion on the daily chart | Chart: TradingView.com

This is especially concerning as BTC is strongly correlated with the traditional financial market, going as far as following the S&P 500 and the Dow Jones Index in many instances.

Not to mention that the U.S. Federal Reserve does plan to increase its interest rate if inflation does not slow down in the coming months. This will cause a slow down for SOL’s recovery in the coming months if the situation does not improve. 

For now, SOL investors are on their way to target $11.83 price resistance which, if broken, will provide a jump-off point for more gains in the future. 

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-Featured Image: Shutterstock

Christian Encila

Freelance writing is Christian’s other cup of tea. When not on his computer, he unwinds with a bottle of beer and laughs with his son over cartoons. Other than that, he’s just like everybody else who wants to be happy with their life.

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Bitcoin Backpedals To $16,000 Level As Crypto Market Sheds $50 Billion

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Bitcoin Backpedals To $16,000 Level As Crypto Market Sheds $50 Billion

In the past 24 hours, Bitcoin has slid beneath the important support level of $17,000 as weekly bears have taken the driver’s seat.  The most popular cryptocurrency is presently selling at $16,723, a decrease of 2.5% over the past week.

There has been significant selling pressure on the cryptocurrency market as a whole, resulting in a 6% correction and a $50 billion loss over the past 24 hours. As a result of the latest price decline, BTC has let go of all weekly gains and returned to the red zone.

TradingView and Cointelegraph Markets Pro data followed BTC/USD as it reached multi-day lows on Bitstamp at $16,928. The pair reversed its entire advance to one-month highs in response to the most recent macroeconomic data and the US Federal Reserve’s decision to raise interest rates.

Similarly, the price of Ethereum has dropped more than 7% in the previous 24 hours, according to figures from CoinGecko. The second-largest cryptocurrency has decelerated during the past week, trading below $1,178.

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Bitcoin and Ethereum accounted for the vast majority of the $117 million in leveraged positions that were wiped out throughout the entire cryptocurrency market.

Image: Cryptopolitan

Binance FUD Spooks Investors

The events surrounding Binance have unnerved crypto investors, who have been cautioned against overreacting to “FUD” concerning the exchange and others. Mazars Group, the auditor for Binance’s Proof-of-Reserves, severed ties with the exchange on Friday.

In addition, the current crypto market decline mirrors Wall Street’s severe downturn. Friday marked another 1% fall for the Dow Jones. This price decline is the result of the central bank’s vigorous monetary tightening.

Bitcoin appeared to conclude the year on a positive note at one point after reacting positively to US inflation and Consumer Price Index (CPI) statistics as well as subsequent Fed interest rate decisions.

The CPI measures the rate of price change for a range of goods. The rate increased by 0.1% in November, which is slower than the rate of inflation in October. At that time, the CPI report suggested a 0.3% price increase.

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Crypto total market cap at $764 billion | Chart: TradingView.com

Bitcoin Bulls Still Retain Some Edge

Wednesday, the U.S. Bureau of Labor Statistics reported that based on their criteria, inflation was definitely still rising, albeit at a slower rate compared to the previous month. This indicates that the Federal Reserve’s hawkish efforts to curb inflation have so far been successful.

Jim Wycoff, an analyst at Kitco News, stated that despite the continued drop, Bitcoin bulls have managed to preserve a short-term technical advantage despite the alpha coin failing to maintain its recent gains.

“Bitcoin-U.S. dollar prices are down in early U.S. trading on Friday, as a result of a usual negative adjustment late in the week after reaching a five-week high on Wednesday,” Wycoff said.

Prices, he continued, remain in an “uptrend on the daily chart, and Bulls retain a modest overall near-term technical edge.”

The foundations of Bitcoin’s economy and market continue to be robust, despite the price of BTC experiencing one dramatic decline after another, with each newsworthy blow to the industry’s major players.

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