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Bitcoin RSI points to short-term gains as metric signals BTC price top

Bitcoin RSI points to short-term gains as metric signals BTC price top

CointelegraphCointelegraph2024/04/10 10:13
By:William Suberg

The value days destroyed multiple is hinting at an incoming BTC price macro top, but all might not be as it seems.

Bitcoin ( BTC ) could be seeing the final innings of a macro bull run, a historically accurate on-chain metric says.

The value days destroyed (VDD) multiple, which forecast previous BTC price tops, has hit a “rare” high.

VDD multiple hits “rare” high

Bitcoin has so far failed to flip either new all-time highs or its previous peak from 2021 to firm support.

Some remain confident that BTC price discovery will return, but those analyzing on-chain signals are becoming concerned.

Among them is analyst TXMC, host of YouTube channel Alpha Beta Soup.

Uploading fresh VDD multiple data to X this week, TXMC revealed that the chart had printed highs seen only shortly before BTC/USD puts in macro tops.

“The rare 4.0 print,” he wrote in accompanying commentary.

“Has on-chain momentum topped?”
Bitcoin RSI points to short-term gains as metric signals BTC price top image 0
Bitcoin VDD multiple. Source: TXMC 

The VDD Multiple compares on-chain spending to historical averages to determine when market psychology is dictating a blow-off top for price. The “value days destroyed” component relates to the number of days for which coins were previously dormant when used on-chain.

In March, when the VDD multiple was at around 3.5, TXMC already described it as “overheated.”

“It isn’t perfect, but notable,” he wrote at the time.

This year nonetheless includes a key difference from early 2021. During the VDD multiple’s last spike, BTC/USD had already doubled its prior all-time high of $20,000.

“We are printing the same value in 2024 while still AT the prior all-time high,” TXMC added, concluding that the overall picture was “uncertain.”

RSI preserves key support after flush

As Cointelegraph recently reported , other chart metrics have been giving traders cause for cautious optimism.

Among them are classic pointers such as the relative strength index (RSI), which recently saw a “reset” to levels that last appeared in late January.

Daily RSI stood at 53 on April 10, per data from Cointelegraph Markets Pro and TradingView  — still far below the traditional “overbought” zone, which begins at 70 and tends to accompany the steepest portion of BTC price cycle gains.

Bitcoin RSI points to short-term gains as metric signals BTC price top image 1
BTC/USD 1-day chart with RSI data. Source: TradingView

“In a strong bullish trend, it’s usually time for a bounce when Bitcoin’s daily RSI retests ±50. It’s retesting ±50 right now,” popular traded Jelle noted on the day.

Popular trader Alan Tardigrade reiterated promising signals on 4-hour RSI timeframes in the form of a hidden bullish divergence with price.

"Hidden bullish divergence happens here while $BTC makes a higher low (HL), but RSI is showing a lower low (LL). This signals the possible uptrend continuation," he told X followers alongside a chart.

Bitcoin RSI points to short-term gains as metric signals BTC price top image 2
BTC/USD chart with RSI data. Source: Alan Tardigrade/X

Monthly timeframes continue to hold above 70, a feature on the radar of controversial analyst Plan B and others in advance of Bitcoin’s incoming block subsidy halving .

Bitcoin RSI points to short-term gains as metric signals BTC price top image 3
Source: Plan B

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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