Bitcoin price rose over $5,000 today due to a powerful surge of FOMO, driven following the news that the Elon Musk-led Tesla had added $1.5 billion in BTC to its company reserves.
The strength of today’s buying frenzy has pushed the daily Relative Strength Index back above a key level. A close above it could send the cryptocurrency’s price doubling. Here’s how.
Bitcoin Blasts Off As Tesla Buys $1.5 Billion In BTC
Bitcoin is in what could be its most important bull market ever. The cryptocurrency is no longer only held by early adopters, tech enthusiasts, evangelists, or traders, and is now the focus of hedge funds, institutions, and major publicly-traded corporations.
The trend of companies buying Bitcoin to bolster their staying power ahead of coming economic struggles began with the NASDAQ-listed software firm MicroStrategy. Since then, a domino effect has begun, with Jack Dorsey’s Square Inc. adding BTC to their treasury reserves, followed most recently by Tesla.
Related Reading | Running Bitcoin: Passing The Torch From Hal Finney To Jack Dorsey
Tesla CEO Elon Musk had previously added Bitcoin and hashtag to his Twitter bio, but now has added to Tesla’s holdings to the tune of $1.5 billion in BTC.
The buy alone sustained price action from breaking deeply below $30,000, and news of it making rounds caused Bitcoin to soar by over $5,000 from low to high today.
But what’s more notable, is that the move will have pushed the daily Relative Strength Index back into bull territory if today’s candle can close at or above current levels.
The Relative Strength Index is back in "overbought" bull territory | BTCUSD on TradingView.com
Crypto Prices Could Double If RSI Stays In Bull Zone
The Relative Strength Index is designed to signal when an asset is overbought or oversold. A reading of 70 or 30 suggests an extreme point has been reach, and the chances of a reversal are increased.
In powerfully trending assets, however, they can remain overbought or oversold for a significant amount of time. In the example above, each daily close in overbought territory has resulted in at least another week of upside.
The Relative Strength Index could stay overbought until $90K per coin | Source: BTCUSD on TradingView.com
More dramatic than the amount of time assets can rise while staying overbought, in the above example, Bitcoin has risen as much as another 117% once the RSI makes a close above 70.
Related Reading | Bitcoin Price Closing Above This “Hurdle” Sends Bulls “Off To The Races”
Bitcoin price already rallied $5,000 today alone. If this is just the start of the move and its sustained as the last breakout, the price per BTC could double once again in as little as about one month.
Featured image from Deposit Photos, Charts from TradingView.com