When Bitcoin surpassed its previous all-time high of $20,000, the Weekly Relative Strength Index (RSI) stood at 87. Over the next four months, it surged by 232%. The initial decline happened after Bitcoin doubled to $40,000, leading to a 30% pullback. Currently, Bitcoin's weekly RSI mirrors this earlier peak at 87.
This comparison is promising and should be seen as a positive sign. It's not to suggest that history will repeat itself exactly, but rather to highlight a common oversight: underestimating momentum and the potential for significant gains.
The notion that a high RSI equates to an imminent peak or weakness should be challenged. Resist the impulse to equate market strength with the necessity for a downturn.
We are in a phase of acceleration.
