Bitcoin’s bull market, which has been making waves in the cryptocurrency world, may face an unexpected slowdown. According to Omkar Godbole, a respected analyst with CoinDesk, a key technical indicator is sounding the alarm—hinting at a potential end to the euphoric rally. The indicator in question? The Relative Strength Index (RSI), a momentum oscillator that appears to be losing its steam just as Bitcoin reaches new heights.
A Bearish Signal Amid Bullish Sentiment
The RSI is not just any ordinary tool; it’s a favorite among traders for its ability to measure the speed and magnitude of price movements. Typically evaluated over periods of 14 days, weeks, or months, the RSI’s recent behavior is raising eyebrows. Bitcoin’s 14-month RSI is now showing a bearish divergence. In plain English, while Bitcoin prices continue their upward march, the RSI is declining—forming a lower high. This pattern, especially when it manifests on a monthly chart, suggests the bull market might be losing its mojo.
But there’s more to this story. The bearish divergence isn’t happening in a vacuum. It coincides with Bitcoin hitting resistance at a significant trendline—a line that has its roots in the bull market peaks of December 2017 and November 2021. This convergence of factors has market watchers on edge, wondering if a bearish trend is looming. As explored in Bitcoin Price In A Trend Shift? Here’s Why $118K Might Be Vital For A Bullish Return, the $118K level could be crucial for maintaining bullish momentum.
Traders Still Betting on a Bright Future
Despite the ominous signals from the RSI, the mood among traders isn’t entirely downbeat. Market flows tell a different story. Jake Ostrovskis, an OTC trader at Wintermute, notes that traders are actively positioning themselves for further gains. “Blocks suggest traders are gearing up for further gains, with notable activity in December BTC call spreads ($125K/$160K),” Ostrovskis shared in an email.
These “blocks” refer to large transactions that are privately negotiated over the counter, often involving institutional players and high-net-worth individuals. The activity in December call spreads indicates a bet on Bitcoin rallying to $160,000 or even higher by the year’s end. Such trades are a sign that, despite the RSI’s warning, a segment of the market remains hopeful for a bullish continuation. This optimism is echoed in Bitcoin trader sees $117K coming as BTC price reclaims key trend line, where the reclaiming of a key trend line is seen as a positive sign.
Ethereum, too, is seeing its share of action. With $4,800 strikes active for September, there’s an evident appetite for upward movement. The ongoing front-end pressure is further lifting the market’s expectations.
Historical Context and Future Implications
Bitcoin’s journey has been nothing short of a rollercoaster. From surpassing the December peak in the July-August period to its current price of approximately $110,500, representing a 4.6% loss for August, it remains a focal point of discussion among traders and analysts alike.
As the market grapples with these mixed signals, the big question remains: Can Bitcoin defy the bearish RSI and continue its ascent? Or are we on the cusp of a trend reversal? The stakes are high, with some predicting prices could soar as high as $190,000.
What does this mean for investors? In the unpredictable world of cryptocurrency, vigilance is key. While the allure of significant gains is tempting, the potential for volatility is ever-present.
Looking Ahead
The coming months will be pivotal for Bitcoin and the broader crypto market. As traders navigate these choppy waters, the interplay between technical indicators and market sentiment will be crucial. Will the bulls overpower the bearish signals, or will the RSI’s warning come to fruition?
For now, the crypto community watches with bated breath, eager to see how this saga unfolds. As always, the only certainty in the crypto world is uncertainty itself.
Source
This article is based on: Bitcoin Bull Market May End Early, Warns Key Indicator, But Flows Continue to Lean Bullish
Further Reading
Deepen your understanding with these related articles:
- Was $124K the top? Bitcoin's price peak signals tell a different story
- Bitcoin traders say BTC price at ‘make-or-break’ point at $110K
- More Pain Ahead? Bitcoin and Ethereum Charts Show Mixed Signals: Analysis
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
