The founder of Global Macro Investor and investment strategist, Raoul Paul recently took to Twitter to air his views on the recent Bitcoin dip. Raoul Pal noted that the RSI indicators of Bitcoin has reached its lowest low since March 2020.
The Relative-Strength Indicator is a tool used by Technical analysts to spot lows and highs as well as key support regions and resistances on the price chart. A high RSI indicates that the asset is overbought and the time may just be right for exiting the trade while a low RSI indicates that the market is oversold and buyers may come in soon to pump the price again.
Bitcoin is nearly as oversold as it was in March 2020… pic.twitter.com/ZYHESpW5HG
— Raoul Pal (@RaoulGMI) April 25, 2021
Raoul Pal’s Bitcoin Analysis
As noted by Raoul Pal, the RSI of Bitcoin has gotten to a bottom that it hasn’t reached in over a year. The last time Bitcoin’s RSI fell so low was in March 2020, after the general assets crash caused by the impact of the Coronavirus pandemic. Bitcoin fell from close to $10k to as low as $3.5k before settling around the $5-6K regions that period.
According to Raoul’s analysis, Bitcoin is overdue for a bounce. He also mentioned that Bitcoin’s weekly RSI has fallen to levels that can be compared to the levels of the price correction in the first part of the 2017 Bull Run. Raoul made this observation after Bitcoin dumped from $55,000 to about $47,500 during the past week.
Raoul’s analysis may just be what some investors and traders needed to hear after a seemingly long period of fear and uncertainty in the crypto markets these past weeks. A lot of traders sold their assets in panic speculating that the Bullish Run has gradually come to an end. Six hours after Raoul posted his view on Twitter, Bitcoin bounced significantly and gained a solid 11.5% in the market.
Despite the bounce, however, Bitcoin is still considerably far from its April high of $65000. Its current region of $52000 is still about 25% away from its all-time high. The slight market recovery however has put a lot of traders at ease and has strengthened the conviction of most traders and investors that the Bull Run is still very much alive.