This is a daily analysis by CoinDesk analyst and chartered market technician, Omkar Godbole.
like bitcoin Price weakens, bulls are pinning hopes on a possible money rotation from gold, which is still recovering, to its digital counterpart.
These hopes may get a boost as price charts show that the dollar-denominated bitcoin price per piece is now at its most oversold against the per ounce price of gold, according to the widely followed 14-day Relative Strength Index (RSI).
The oscillator has fallen to 22.20, just below the February low to levels last seen in November 2022. Readings below 30 are generally interpreted as oversold conditions, indicating that an asset, in this case BTC, has recently experienced significant selling pressure relative to gold, which could push the relationship between the two to undervalued levels.
However, an oversold RSI reading alone does not guarantee an immediate bullish reversal for BTC against gold. This condition requires confirmation from other technical indicators, such as signs of bearish trend exhaustion in price action, bullish divergences, or increased buying volume. Without these supportive signals, the oversold state can persist during strong downtrends, meaning the price could continue to fall despite the low RSI level.
At the time of writing, the bitcoin-gold ratio remains in a pronounced downtrend, marked by prominent red candles highlighting seller dominance amid the recently confirmed death cross: the bearish cross of the 50-day and 200-day simple moving averages (SMA).
Given this bearish technical backdrop, BTC bulls will need to be patient and wait for clearer signs of a trend reversal before expecting a sustained recovery.
BTC/USD looks south
The same can be said about BTC’s dollar-denominated price, as it looks like it will test the lower end of the expanding channel, currently below $100,000.
The 14-day RSI has yet to reach oversold territory, and the MACD histogram continues to print deeper bars below the sign, suggesting there is room for the ongoing sell-off to continue. Additionally, prices appear to have found acceptance at the 200-day SMA, which could spur selling by momentum traders.
With prices below the 200-day SMA, attention is focused on the lower boundary of the expanding channel, currently around $99,500.
Here is the refined and developed version of his prayer:
The 50-week simple moving average (SMA), currently around $101,700, remains a critical support level for bitcoin. Throughout the bull run that began in early 2023, this moving average has consistently provided a reliable foundation, helping to sustain rallies and drive prices to new highs.
