Popular crypto currency analyst and trader Kevin Svenson has warned that Bitcoin (BTC) could face a major correction before revisiting its all-time high levels. The analyst said that the largest crypto currency is in the overbought zone according to the Relative Strength Index (RSI) indicator on the weekly time frame, which could be signaling a downturn.
Attention to Bitcoin’s RSI
In a new video to his subscribers, Svenson pointed out that Bitcoin is in the overbought region on the weekly time frame based on the RSI indicator. As is known, RSI measures the price momentum of an asset on a scale from 0 to 100. A level below 30 indicates oversold conditions, while a level above 70 indicates overbought conditions.
Based on the current data from the RSI, the analyst issued a warning for Bitcoin, saying:
Bitcoin is at a very strange point on the weekly chart. Currently, the RSI is above the level of 70 on the weekly. If it can’t sustain above the 70 level, then pullbacks can be expected. In such a scenario, everything would start to fall sharply. As long as there is a bounce above 70, I would call that a strong uptrend. Then we can expect the uptrend to continue.
If the RSI can’t surpass the 70 level and turns back, that’s where a correction can be expected. From this point, some ugly liquidations could be anticipated.
“Flash Crash” Warning
On the other hand, Svenson highlighted that in a bullish scenario, Bitcoin would face a strong resistance zone between $57,000 and $60,000. Commenting on the scenario of a rally resulting from the SEC’s green light for a spot Bitcoin ETF, the analyst said:
So if there’s a bullish speculation like the approval of a spot Bitcoin ETF that triggers the rally and everyone entering the market is rewarded, then we can say Bitcoin has reached its peak. If it reaches the all-time high levels without a correction in the $57,000 – $60,000 region, I think you will probably see a flash crash before reaching the all-time highs. In such cases, a flash crash is always a possibility.
