What to know:
- The 14-month RSI for Bitcoin shows signs of bearish divergence.
- Traders are still optimistic about a year-end rally, with significant options activity indicating targeting prices near $190,000 for December.
Daily Analysis from CoinDesk
A critical technical indicator warns that the Bitcoin (BTC) bull market may come to an early conclusion, despite traders’ ongoing preparations for a potential rally as the end of the year approaches.
The indicator in question is the Relative Strength Index (RSI), a momentum oscillator that ranges between 0 and 100 and assists traders in assessing the speed and magnitude of recent price changes, commonly calculated over a 14-day, 14-week, or 14-month duration.
Currently, Bitcoin’s 14-month RSI indicates a bearish divergence, a pattern where the indicator decreases even as prices rise. Such divergence, viewed on the monthly chart, suggests BTC’s bullish trajectory could be weakening, possibly leading to a bearish shift.
BTC’s Monthly Chart
The chart shows contrary movement of the RSI against Bitcoin price movements.
With Bitcoin facing resistance at a key trendline established from bull market peaks in December 2017 and November 2021, bulls are advised to be cautious as they might face trend reversals. However, the latest market data indicates that traders forecast ongoing price appreciation.
“Blocks indicate that traders are positioning for further gains, especially with notable December BTC call spreads aimed at $125K/$160K, while Ethereum focuses on tighter options at a $4,800 strike.”
As of the latest reports, Bitcoin is trading around $110,500, reflecting a 4.6% decrease for the month, per CoinDesk’s data.
