The Bitcoin price trades close to the $26,000 level during today’s trading session, as it has since last week. However, new data points to a potential breakout out of the current range and into previously unexplored territory in 2023.
As of this writing, Bitcoin trades at $25,950 with sideways movement across the board. Other cryptocurrencies in the top 10 by market capitalization display similar price action as the sector enters another period of low volatility.
Bitcoin On The Verge Of Making A Decision?
The co-founder of crypto analytics firm Glassnode, Yann Allemann, recently shared data that could hint at a potential rebound. Via social media X, Allemann pointed at Bitcoin’s Relative Index Strength (RSI), a metric used to measure when an asset has entered overbought or oversold territory.
BTC’s recent downside price action pushed the RSI to a historical oversold level, 28. The chart below shows that almost every August with a negative RSI and a BTC monthly return north of 10% leads to a sideways September but to a green October.
If the price of Bitcoin moves in tandem with its history, this decline in performance and RSI could hint at massive gains for the cryptocurrency in the coming two months. The Glassnode co-founder stated the following:
Past trends suggest that such movements often indicate the potential for upward price shifts. This implies that as sellers grapple with further drops, the stage might be set for a reversal in the near future.
Also, the chart shows that Bitcoin rarely sees two Octobers in the red following a bear market as the one experienced in 2022. This fact adds to the bullish thesis for Bitcoin as 2023 enters its final months, and new narratives increase their influence over the price action.
On the other hand, Allemann pointed at the increasing Open Interest (OI) for Bitcoin as prices trend sideways. The analyst believes that most OI comes from traders opening long positions.
As the OI rises, BTC will likely see another aggressive move. Short liquidation could push the cryptocurrency back into its previous range if the price trends to the upside. However, if the opposite occurs, the high amount of long positions could push BTC into crucial support.