Analyst Predicts Bitcoin Local Bottom

An analyst who accurately predicted Bitcoin’s correction in Q1 2024 believes BTC is nearing a local bottom based on a technical momentum indicator.

Pseudonymous analyst Rekt Capital informs his 542,000 followers on the social media platform X that Bitcoin’s relative strength index (RSI) on the daily chart has plunged into oversold territory. Traders closely monitor the RSI as it can often signal points of trend reversal.

Rekt Capital notes that since November 2022, Bitcoin has consistently rallied each time the RSI dipped into oversold levels on the daily timeframe.

> “Bitcoin’s Daily RSI equaled 2022 Bear Market RSI levels (RSI=23.93) when the price crashed into the high $70,000s.
> The only lower Daily RSI in this cycle was back in August 2023 (RSI=18.28).
> Throughout this cycle, each visit into sub-25 RSI resulted in a trend reversal to the upside over time.”

According to Rekt Capital, historical data suggests that Bitcoin might find a solid bottom between $78,000 and $71,700.

> “Bitcoin has made yet another Lower High on the Daily.
> There’s no denying that.
> But throughout this entire cycle, whenever Bitcoin would reach 28 or lower on the RSI…
> Bitcoin’s price would either bottom or be between -2% to -8% away from the bottom.”

To support his assertion that Bitcoin is bottoming out, the trader posits that BTC may be mirroring the layer-1 protocol Cronos (CRO). Rekt Capital suggests that CRO might be ending its downtrend with a double-bottom pattern.

> “What’s interesting to see is that BTC is trying to build out a potential Double Bottom-like formation here.
> Whereas CRO has potentially broken out from its own Double Bottom, in fact leading Bitcoin.
> Other Altcoins are in varying phases of their own respective Double Bottoms.”

A double-bottom structure is traditionally viewed as a bullish reversal pattern, indicating that the asset has found a price floor and is gearing up for a potential upside surge. Based on the trader’s chart, he implies that CRO has surpassed the resistance of the pattern at around $0.08. At the time of writing, CRO is trading at $0.80.

As of now, Bitcoin is trading for $82,207, down over 4% in the past day.