After weeks of rallying to reclaim the $24,000 spot briefly, Bitcoin’s (BTC) price is undergoing a correction primarily tied to emerging regulatory concerns in the United States. Amid the uncertainty, investors are looking at various technical indicators likely to hint at what to expect next.
In particular, in a tweet on February 12, crypto analyst by the Twitter pseudonym Elcryptoprof, noted that one of Bitcoin’s key technical indicators, the Rainbow Relative Strength Index (RSI), has turned green for the first time after an extended correction.
This is a significant development for Bitcoin, as the trend suggests that the long-term momentum is likely bullish. According to the analysis by the expert, similar green crossovers in the past have marked the beginning of significant bull runs.
For example, the green crossover in 2012 marked the start of a bull run, while the green crossover in 2019 also ushered in the beginning of the last major rally. However, Elcryptoprof pointed out that the trend in 2015 resulted in a fakeout before a major rally. In this line, it is worth noting that past performance is not indicative of future results, and it remains to be seen whether Bitcoin will experience a similar surge in price this time around.
The Bitcoin Rainbow RSI is a modification of the main TSI technical indicator similar to the Rainbow Ribonacci that is characterised with the Rainbow Ribbon of Fibonacci period and levels.
Bitcoin price analysis
Bitcoin has since plunged below the $22,000 level, but it remains in the green zone on the yearly chart. By press time, Bitcoin was trading at $21,847.
Indeed, the latest correction follows the recent move by the Securities Exchange Commission (SEC) to crack down on staking. In particular, the regulator reached a deal with crypto exchange Kraken which will halt its staking services.
However, crypto trading expert and analyst Michaël van de Poppe suggested that the Bitcoin correction is minor, linking it to SEC ‘FUD’ that has resulted in more investors getting out of the market.
“A week ago, it was $24,500, and people rushed to get in. Right now, price is at $21,700, and due to some SEC FUD, people want to rush out. Erase context. Price is low, undervalued, and will be way higher in the future. Use these prices to accumulate,” he said in a tweet on February 11.
As Bitcoin faces bearish pressure, investors will be looking out for key events likely to influence macroeconomic factors. In the coming week, investors are focused on Consumer Price Index data, Retail Sales and Empire State update, and Producer Price Index.
Interestingly, the bearish trend is also exhibited in upcoming Bitcoin price projections. In this line, as reported by Finbold, the machine learning algorithm at PricePredictions indicated that the maiden crypto is likely to trade at $21,632 on February 14, 2023.
Bitcoin technical analysis
In the meantime, Bitcoin’s one-day gauges on TradingView remain bullish. A summary of the technical analysis is for the ‘buy’ sentiment at 13, while moving averages also support the same sentiment gauging at 8. Elsewhere, oscillators are for ‘buy’ at 5.
As Bitcoin appears to face stagnation, the overall market sentiments remain uncertain.
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