Real Vision crypto analyst Jamie Coutts says Bitcoin (BTC) price is poised to continue its recovery after a temporary correction. Former Bloomberg analyst notes that Bitcoin has broken a bearish pattern and is preparing for a larger move upwards. According to Coutts, Bitcoin’s recent performance is sending a signal of a turnaround in the market and has many investors excited.
Bitcoin’s breaking of the flag pattern, which has been a historically important resistance level, is a development that attracted the attention of analysts. This signals a strong bullish trend in the market and suggests that Bitcoin is poised to move towards new highs. “Bitcoin looks set to beam higher, breaking the flag pattern at all-time highs,” Coutts said. “Blue skies (no historical overhead resistance) are a factor that accelerates bull markets.” says.
To the analyst according toAnother positive sign for Bitcoin’s recovery are two key indicators such as funding rates and the Relative Strength Index (RSI). Funding rates indicate the fees paid between long and short positions in Bitcoin’s perpetual futures contracts. These ratios show which direction the market is weighted in and can be a sign of excessively long or short positions. A high funding rate may indicate that extremely long positions are predominant in the market, which can be interpreted as a correction or reversal signal.
RSI is a widely used momentum indicator that aims to determine whether an asset is overbought or oversold. The RSI is usually read between the 30 and 70 levels. Above 70 may indicate overbought, while below 30 may indicate oversold. Seeing Bitcoin’s RSI return to favorable levels may indicate that a new upward move may be starting.
“The pullback allowed funding rates to retreat to a more ‘normal’ level (20% annually) and the RSI stepped back from overbought (RSIs are regularly overbought in strong uptrends).”
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The analyst also says long-term investors are selling as Bitcoin hits all-time highs, but demand from recently launched spot Bitcoin exchange-traded funds (ETFs) may pull in supply.
“According to on-chain data, it is clear that long-term investors are distributing at the most aggressive pace since November 2020. “The degree to which ETF demand absorbs this supply will have a major impact on the shape and duration of this bull market.”
Coutts has previously said he thinks gold will significantly underperform digital assets in the current market cycle.
At the time of writing, Bitcoin is trading at $70,000, down slightly.
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