CMT-Certified Expert Explains Why Bitcoin May Not Reach Past Extremes On Indicators

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A crypto market technician is debating whether Bitcoin has reached its peak this bull cycle, as technical indicatorssuggest a potential loss of momentum. The analysis report highlights technical indicators like the Relative Strength Index (RSI)which failed to reach past extremes, raising concerns about Bitcoin’s future trajectory. Bitcoin Indicators Fall Short Of Historical Peaks

Bitcoin has historically exhibited strong indicator readings during major cycle tops, reflecting extreme market engagement and enthusiasm. However, in this bull cycle, the pioneer cryptocurrency’s RSI reading has failed to reach historical peaks despite Bitcoin reaching newall-time highs.  Related Reading CMT-Certified Expert Explains Why Bitcoin May Not Reach Past Extremes On Indicators 1 hour ago

Tony Severino, a crypto market technician on X (formerly Twitter), has Bitcoin Price Risks Further Crash As S&P Monthly LMACD Turns Bearish, Why Bulls Have Only 20 Daysa detailed analysis of Bitcoin, challenging the assumption that the cryptocurrency must reach the same overbought RSI levelsas in previous cycles to confirm its market peak. The key argument here is that lower highs on oscillators like the RSI, combined with higher highs in Bitcoin’s price, can be a bearish signal, suggesting waning strength in the market. 

Severino shared an example comparing Bitcoin’s current bull cycleto past cycles. In the previous bull market, Bitcoin’s monthly RSI reached above 90, but its current cycle has not. The analyst posed a question about whether this inability to reach past extremes means that Bitcoin hasn’t reached a market topor simply lacked the same momentum to push its RSI to the highest level.  Source: Tony Severino on X

The analyst has warned that believing that Bitcoin must reach past extremes on indicators before hitting a price peak is a dangerous way of thinking. Historical patterns do not always repeat in the same way, and relying too much on past indicator peaks could cause traders to miss warning signs of a top or underestimate the possibility of a bear market. 

Severino also pointed to historical data from the S&P 500in the 1950s and 1960s, where similar RSI failure preceded a long market meltdown. During these times, cyclical peaks hit RSI readings of 77 or higher, but in 1969, the RSI failed to reach those highs, signaling underlying weakness. This market downturn ultimately led to the first lower low in over 20 years. 

While this historical behavior of the S&P 500 does not mean that Bitcoin is destined for a lower high, it does suggest that the cryptocurrency does not need to reach extreme RSI levels to confirm a cycle top and a subsequent bear market.  Analyst Says BTC Has Hit Its Market Top

In his analysis Severino confirmed that Bitcoin has already hit its market top for this bull cycle. Following his detailed analysis of Bitcoin’s RSI levels, a community member askedif Severino believes that Bitcoin reached a market top when its price surged above $109,000.  Related Reading This Analyst Predicted The Bitcoin Price Crash From $91,000, Why It’s Far From Over 1 week ago

The analyst respondedpositively, stating that current market data indicates that the cryptocurrency hit its highest price point for this bull cycle after Donald Trump’s US Inauguration Day. At the time, Bitcoin soared past $109,000, setting a new ATH and surpassing previous records. BTC trading at $84,178 on the 1D chart | Source: BTCUSDT onTradingview.com Featured image from Unsplash, chart from Tradingview.com