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Bitcoin price has shown resilience in the face of adversity and is up nearly 100% from bear market lows. However, it has yet to show any undeniable bullish signs as it has in the past.
According to the new BTCUSD weekly chart, this is due to just one missing ingredient.
Bitcoin Bullish Momentum: The Missing Ingredient
When baking, or especially when baking, missing a single ingredient can change the end result of a desired dish or dessert. For example, sweets without sugar are not as sweet. A prime cut of steak doesn’t taste as good if it isn’t properly marinated and seared.
Likewise, a crypto bull market at overbought levels without a weekly relative strength index is simply not a bitcoin bull run. Historically, reaching oversold conditions for bitcoin has been a requirement for a full bullish impulse. The 1W RSI is currently lacking a major signal that is preventing the market from moving up dramatically.
It’s been a long time since bulls had a turn | BTCUSD on TradingView.com
Why an overbought RSI is needed for a full-bore BTCUSD rally
The term “full-bore” is quite appropriate Merriam Webster Defining it as “with maximum effort or speed”. The Relative Strength Index provides a reading on momentum by measuring the speed of price change within a specific time period. Maximum buying or selling effort is required when prices are moving extremely quickly in one direction.
This is why reaching an overbought or oversold position can result in a reversal – maintaining maximum momentum requires an ever-increasing effort. However, in cryptocurrencies, the speculative nature of their pricing can result in extreme phases of FOMO where positions remain overbought for long periods of time. Such phases, called bullish impulses, have historically shown corresponding overbought levels in the RSI for BTCUSD.
This particular component is currently still missing in 2023, followed by a last appearance in 2021 and before that in 2019. During the 2017 bull run in crypto, bitcoin repeatedly reached overbought levels, only to slide back into the zone as it kept rising higher and higher. Will BTCUSD move up on the weekly and complete the prescription? Or is it a sign of a bullish market bearish?
This chart originally appeared Issue #11 of Coinchartist (VIP), Subscribe now for FREE.
