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Bitcoin (BTC), after the sharp drop that shook the overall cryptocurrency market, is showing signs of potential recovery. Analysts and experts remain optimistic about the future performance of the largest cryptocurrency, citing technical indicators and a combination of past price patterns as the reasons for this optimism.
Relative Strength Index Gives Bullish Signal
Experienced anonymous cryptocurrency analyst El Crypto Prof pointed out in his Bitcoin analysis on August 20th that the recent price drop pushed the Relative Strength Index (RSI) to its lowest level in over 20 months, indicating an almost oversold condition.
Looking at the price chart shared by the analyst, it can be seen that Bitcoin has reached an important line that has been acting as resistance for about a year but has been serving as support for some time. The most noteworthy aspect in El Crypto Prof’s analysis is the relationship between the RSI value of BTC dropping below 30 and the subsequent price movements. According to the analyst, whenever RSI falls below this threshold, Bitcoin tends to experience impressive increases ranging from 28% to 60% in price:
The daily timeframe price chart of BTC has now reached the lowest RSI value in over 20 months and also indicates that it has reached an important line that has been acting as resistance for nearly a year but has been serving as support for some time. BTC has increased by 28% to 60% in price every time RSI falls below the 30 level. There is currently no reason to expect a decline.
The recent drop in Bitcoin’s price, which revisited the $25,000 level, offers comfort to investors as it indicates that the current market conditions may be favorable for a significant price increase, as pointed out by El Crypto Prof in reference to this historical bullish pattern.
Expectations of a Rally in Bitcoin
Following the recent drop in the price of the crypto king, analysts frequently advise closely monitoring the support zone around $25,000. The prevailing consensus is that Bitcoin may experience a rally due to factors such as the potential approval of a spot Exchange Traded Fund (ETF) and the upcoming block reward halving event.
However, a series of events, including reports of entrepreneur and billionaire Elon Musk selling Bitcoin assets of his company SpaceX, have been causing anxiety in the cryptocurrency market. Allegedly, SpaceX sold $373 million worth of BTC, but the exact timing of the sale remains uncertain.
