Based on a technical indicator flashing a trend reversal, a popular cryptocurrency analyst has predicted a massive Bitcoin ($BTC) price rally for next year, implying that BTC’s sell-off is nearing an end.
In a tweet to their nearly 190,000 Twitter followers, pseudonymous analyst Inmortal noted that Bitcoin is showing a bullish divergence on its three-day chart, with its Relative Strength Index (RSI) making higher lows.
A bullish divergence occurs when prices are falling to new lows but the oscillator is not falling. According to Investopedia, such a divergence “shows that bears are losing power and that bulls are poised to retake control of the market.” A bullish divergence could even signal the end of a downward trend.
The RSI is a momentum indicator that is used to determine whether an asset is overpriced or underpriced by measuring the speed and magnitude of price changes. It’s an oscillator that first appeared on the market in 1978.
Inmortal then shared a Bitcoin price chart depicting the cryptocurrency’s rise from around $3,000 to nearly $30,000 after the bear market bottomed in 2019, predicting that the cryptocurrency will repeat such a rally in 2023.
According to CryptoGlobe, several analysts are bullish on BTC. A VanEck fund manager recently predicted that the price of the flagship cryptocurrency Bitcoin could rise to $30,000 in the second half of 2023 after falling to a low near $10,000 to $12,000 in the first half.
Earlier this month, billionaire investor Tim Draper, founder of Draper Associates and one of Silicon Valley’s most well-known investors, doubled down on his $250,000 Bitcoin price prediction, predicting that the cryptocurrency will reach that level by June of next year.
Draper isn’t the only billionaire who believes in cryptocurrency. Billionaire investor Mike Novogratz has stated that he still believes Bitcoin will trade at $500,000 per coin in the future, but has postponed his prediction due to the Federal Reserve and other central banks raising interest rates to combat inflation.