According to seasoned trader and analyst Tone Vays, a Bitcoin (BTC) drop below the important psychological level of $20,000 is currently improbable.
After today’s BTC rally over $22,000, Vays informs his 123,000 YouTube viewers that the likelihood of Bitcoin sliding below $20,000 has been greatly diminished.
“If [Bitcoin] returns above yesterday’s swing high [$21,650], I believe a drop below $20,000 is now very improbable.”
One indication on Bitcoin’s weekly chart, according to Vays, shows that BTC has more long-term upside potential.
“The RSI [relative strength indicator] is very effective. The RSI has considerable upward potential. It has not even surpassed its previous peak. Thus, the weekly RSI remains somewhat optimistic.”
Vays also feels that Bitcoin’s bear market bottom was likely reached in November when BTC fell below $16,000.
“Because of the BitMEX financing rate, the funding rate indicated that ‘Hey, this is most likely the bottom’ Their financing rate is a remarkable signal. This signaled to me that the bottom has likely been reached, not absolutely, but probable.”
The financing rate is closely monitored by market players since it indicates if traders are excessively optimistic or pessimistic about cryptocurrencies. Extremely negative funding rates, such as what was seen in November 2022, indicated that traders were speculating heavily that crypto would continue to decline, setting the stage for a significant response in the other way.