Cryptocurrency analyst Kevin Svenson has cautioned that Bitcoin could face a significant correction before revisiting its all-time high. He bases this warning on the Relative Strength Index (RSI), which currently indicates that Bitcoin is in the overbought territory on the weekly chart, potentially signaling a downturn.
In a new video to his subscribers, Svenson points out that Bitcoin’s RSI on the weekly timeframe is above 70, a level considered overbought. The RSI measures price momentum on a scale from 0 to 100, with levels below 30 indicating oversold conditions and above 70 indicating overbought conditions.
Svenson warns that if Bitcoin’s RSI cannot sustain above 70, it could lead to pullbacks. A failure to maintain this level could result in sharp declines. Conversely, as long as the RSI remains above 70, it suggests a strong uptrend.
Furthermore, Svenson highlights that Bitcoin faces strong resistance between $57,000 and $60,000. He speculates that a spot Bitcoin ETF approval could trigger a rally, but if the price reaches the all-time high without a correction in this resistance zone, a flash crash is likely to occur.
Svenson’s analysis suggests that investors should be cautious, as Bitcoin’s current RSI levels could precede a significant market adjustment, especially if key resistance levels are breached without proper consolidation.