The importance of oversold RSI to play a buyer rebound
Updated
Since 2012, Bitcoin has found itself in an oversold zone with an RSI 14 < 30 only twice:
- from January 06 to 17, 2015, bullish rally with a bullrun from January 13, 2015 to December 16, 2017
- from November 13, 2018 to December 16, 2018: ongoing rebound with an RSI 14 suddenly gone from a value of 28 (<30) to 48 today
Focus on January 12, 2015:
The December 15, 2018 could well mark the lowest point of this bear market that has spread throughout the year 2018: in other words, never see BTC below the $ 3,000 mark?
However, we must remain vigilant for some time because we can not exclude the spectrum of the bull trap by dead cat bounce known on the rebound of September 29, 2014 before 3.5 months of additional bear market until the real bottom of January 12, 2015.
But the RSI 14 at the bottom of the September 29, 2014 had grazed the value of 30 without descending lower, contrary to January 13, 2015 and ... December 10, 2018!
The RSI 14 should not be considered as gospel word, but it converges today with other signals such as the Fibonacci retracement used in my previous idea which also announced an end of bear market imminent, so very encouraging to play the rebound to the purchase!
Also keep in mind that following the January 12, 2015, which was certainly the ultimate purchase point of entry, it took almost the whole year 2015, 10 months of horizontal corridor oscillating between 200 and 320 $ ( "range"), before entering the real bullrun 2016-2017.
Finally, the psychological dimension of a market is in my opinion primordial and trade!
Indeed, the RSI14 is not a crystal ball that predicts the future, but when the price drops and breaks a support, that the RSI sinks under the 30 as these days, it is likely that many of investors will play the rebound when the RSI will head over the 30 as today! These are called self-fulfilling phenomena, self-fulfilling prophecies: everyone sees the same thing and reacts sheepishly.
This mimicry stock market is interesting to exploit precisely on psychological zones.
WARNING:
This is not an investment advice.
Only invest what you are willing to lose.
Do not listen to any "prophet", only rely on your own opinion.
- from January 06 to 17, 2015, bullish rally with a bullrun from January 13, 2015 to December 16, 2017
- from November 13, 2018 to December 16, 2018: ongoing rebound with an RSI 14 suddenly gone from a value of 28 (<30) to 48 today
Focus on January 12, 2015:
The December 15, 2018 could well mark the lowest point of this bear market that has spread throughout the year 2018: in other words, never see BTC below the $ 3,000 mark?
However, we must remain vigilant for some time because we can not exclude the spectrum of the bull trap by dead cat bounce known on the rebound of September 29, 2014 before 3.5 months of additional bear market until the real bottom of January 12, 2015.
But the RSI 14 at the bottom of the September 29, 2014 had grazed the value of 30 without descending lower, contrary to January 13, 2015 and ... December 10, 2018!
The RSI 14 should not be considered as gospel word, but it converges today with other signals such as the Fibonacci retracement used in my previous idea which also announced an end of bear market imminent, so very encouraging to play the rebound to the purchase!
Also keep in mind that following the January 12, 2015, which was certainly the ultimate purchase point of entry, it took almost the whole year 2015, 10 months of horizontal corridor oscillating between 200 and 320 $ ( "range"), before entering the real bullrun 2016-2017.
Finally, the psychological dimension of a market is in my opinion primordial and trade!
Indeed, the RSI14 is not a crystal ball that predicts the future, but when the price drops and breaks a support, that the RSI sinks under the 30 as these days, it is likely that many of investors will play the rebound when the RSI will head over the 30 as today! These are called self-fulfilling phenomena, self-fulfilling prophecies: everyone sees the same thing and reacts sheepishly.
This mimicry stock market is interesting to exploit precisely on psychological zones.
WARNING:
This is not an investment advice.
Only invest what you are willing to lose.
Do not listen to any "prophet", only rely on your own opinion.
Trade active
Let's go to GANN's Square, in coordinates 0 to ATH: Bubble 2013-2014: Final release of the bear market in January 2015
at the crossroads of support (Level 4 green horizontal line)
with resistance (red vertical 2x1 fan)
Bubble 2017-2018: (Final?) Release of the bear market in December 2018
at the crossroads of support (Level 4 green horizontal line)
with resistance (red vertical 2x1 fan)
+ Range $ 3000-5000 between January and October, 2019 ?
Have a great weekend everyone!
WARNING:
This is not an investment advice.
Only invest what you are willing to lose.
Do not listen to any "prophet", only rely on your own opinion.
Trade active
2014:-87% of total retracement
-44% retracement between the 2 lowers
2018
-84% of total retracement
-46% retracement between the 2 lowers
2014
2018
Trade active
So, if the Bitcoin story were to be repeated, the $ 3120 of December 15 (2018) would be the best entry point for the next 5 years?Note
2013-2015: From 160 to 160 $ = ~450 daysThen to re-enter the area 61.8-50% = ~ 500 days
2016-2017: Intermediate period = ~ 475 days
2017-2018: From $ 3200 to $ 3200 = ~ 457 days
Then to re-enter the area 61.8-50% = ~ also 500 days?
= ~ May 2020 to finally go over $ 7600?
The idea is simply to note that if the bottom was the 15-12-2018, the duration (~ 450 days) of the "2017-2018 pump & dump" is identical to that of the "2013-2015 pump & dump"
Note
Hi,I also showed you the interest in Weekly of the RSI 14 >80 signal therefore overheating/overbought, which allowed me to declare in May 2019:
"So what the RSI is telling us today (May 2019) is that Bitcoin will not be able to reach the $ 20,000 without a correction at least as important as that of June 2016."
So I will post an update below to analyze this same signal today, December 02, 2020.
Note
Dear investors,This RSI 14 indicator oversold in Weekly (< 40) allowed us to place ourselves in "buy & hold" in mid-December 2018 with a BTC < 4 k$, see this publication.
This same signal (among other rebound on the MA 200 Weekly, see my other publications) was given back to us in March 2020 (RSI 14 < 40) to allow latecomers to obtain a 2nd time of BTC < 4 k$.
Perfect !
We now see that the RSI 14 in Weekly is overbought > 80.
Its value can still go up to 100 allowing to continue the Bullrun, it is a possibility not to be excluded.
However, you would have to be totally oblivious to buy Bitcoin with such an overheated RSI !
So let's continue to benefit from our Hodl of informed investors, comfortably installed, since we are now protected by an x5 on our purchase value.
And let's leave trading on these levels to the euphoric little speculators!
You have surely noticed that, as in the previous bullrun of 2017, the media are responsible for sending them to the slaughterhouse.
Altcoins, on the other hand, with their promises of super-fast earnings on "empty shells", will take care of finishing them off, making them pay for their greed and impatience.
We are back at Bitcoin's ATH, and as in February 2017, we now risk a correction, such as a "Handle" of the 2017-2020 giant Cup.
Symmetrical Cup / Cup decidedly very similar to that of 2013-2017 as I have emphasized many times in the past in my publications!
The only difference is that it was built from a symmetrical triangle (2017-2020) instead of a bullish flag (2013-2015). But these are two bullish pause patterns that subsequently foreshadow a bullrun exploding the ATH upward:
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