Bitcoin’s RSI is at the lowest before a halving event

Relative strength index (RSI) of Bitcoin is a trading indicator that measures whether an asset is overbought or oversold. Technical analysts use RSI to assess whether the price of the cryptocurrency is close to the bottom or top. At the moment, Bitcoin’s RSI is at historically low levels weeks before the cryptocurrency’s halvening is scheduled to take place.

Bitcoin heads into halvening with bearish momentum.

During previous bitcoin halvening events, the Relative Strenght Index had always shown an uptick in buying activity. However, this time around bitcoin’s RSI is at historically low levels indicating that the leading cryptocurrency is exceptionally oversold before its next halving, which is scheduled to take place in May 2020. A notable Bitcoin bull and a trader with pseudonym PlanB also tweeted the same.

Typically, the drop in RSI indicates that Bitcoin is very near to a local bottom, but the uncertain macroeconomic situation makes this prediction less unclear due to the looming global economic crisis because of the pandemic.

Bitcoin is still coupled with traditional markets.

At the time of writing, the leading cryptocurrency is changing hands at just above $6,700 mark, 1.3% down in the last 24 hours. In a time of uncertainty, bitcoin has shown a stronger correlation with the stock markets than with safe-haven assets like precious metal Gold. The leading cryptocurrency seems to correlate strongly with the S&P 500 and traditional financial markets. Financial markets all over the world are crashing because of the coronavirus outbreak as countries continue to remain under lockdowns. Over 1,800,000 people have been diagnosed with COVID 19, and more than 114,000 people have died because of this virus. Therefore, the short-term prediction for bitcoin is still quite bearish.

Earlier, crypto exchange BitMEX CEO Arthur Hayes predicted that bitcoin could retest $3,000 level in the coming weeks as financial markets are poised to crash. Veteran trader Peter Brandt also tweeted a bearish chart as the price broke below support confirming the bearish head and shoulders pattern, but he later deleted the tweet.