Bitcoin is poised for a new “major rally” as the RSI copies the 2018 bear market rally

Bitcoin (BTC) is poised for a new “major rally” as market strength copies conditions after the 2018 bear market.

According to the latest analysis, BTC/USD will continue to rise “after some consolidation” thanks to important signals from its Relative Strength Index (RSI).

Bitcoin is showing never-before-seen bullish divergence

With BTC price gains yet to come, bitcoin bulls are feeling increasingly confident in the current rally despite widespread suspicion about the longevity.

For popular trader Crypto Wolf, a key phenomenon now underway is what sets Bitcoin’s recent recovery apart from all others.

The RSI, he noted on Jan. 18, had printed a long-awaited bullish divergence on weekly timeframes – something that has never happened before.

“BTC printed a rare weekly bullish RSI divergence. Never happened before in BTC history, a once-in-a-lifetime opportunity,” he summarized on Jan. 21.

The RSI is a basic gauge used by traders to determine if an asset is overbought or oversold at a given price. The weekly print has been a long time in the works, and Cointelegraph gave advance reports of its arrival late last year.

“The techs were there, the charts were screeching, but as usual the majority was in full bear mode,” added Wolf.

BTC/USD 1-week candlestick chart (Bitstamp) with RSI. Source: TradingView

Analyst: “Some consolidation” will precede the move higher

With that, Bitcoin is beginning to repeat the kind of renaissance last seen at the end of its previous bear market in early 2019.

Related: Dead cat jumps? Bitcoin price is approaching a new 5-month high of $23,000

Trader and analyst Trader Tardigrade, also known as Alan on social media, therefore predicts that the good times are here to stay.

“BTC repeated the pattern in RSI and price action up to the 2019 bottom,” he told his followers last week.

“On the daily chart 1. RSI Strong uptrend into the overbought zone 2. $BTC had a significant drop before that 3. Suddenly buyers started buying up $BTC. After some consolidation, a big rally will follow.”Annotated BTC/USD chart. Source: Trader Tardigrade/ Twitter

The daily RSI is close to 87 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView.

This is the highest level since January 2021, months before BTC/USD hit new all-time highs of $58,000 in April and $69,000 in November.

BTC/USD 1-day candlestick chart (Bitstamp) with RSI. Source: TradingView

The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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