Analyst: Before the CPI announcement, the trend of Bitcoin's RSI index has formed a bullish divergence
CoinDesk analyst Omkar Godbole stated that Bitcoin fell below $80,000 this Tuesday, hitting a months-long low. However, the Relative Strength Index (RSI), a widely used momentum oscillator indicator, is signaling a potential bullish rebound. This indicator has produced a higher low point contradicting the lower lows on the Bitcoin price chart, creating what's known as bullish RSI divergence. This suggests that while prices are falling, the momentum behind selling is weakening and may indicate an imminent reversal to a bullish trend.
The analyst added: "It couldn't be more interesting timing for this pattern to emerge today because at 8:30 PM Eastern Time Zone, US Consumer Price Index (CPI) data for February will be released which is expected to show progress. The BTC's RSI bullish divergence means that it's ready to respond positively to any potential weak readings."
According to CNBC reports, data is expected to show that overall CPI and core CPI excluding food and energy increased by 0.3% month-on-month in February. This implies an annual increase of 2.9% for overall CPI and 3.2% for core CPI respectively - both down by 0.1 percentage points from January.
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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