Bitcoin on the Brink: Top Analyst Warns RSI and AO Spell Trouble

Renowned technical analysis expert Cold Blooded Shiller recently took to Twitter to share a comprehensive thread on the concerning state of Bitcoin ($BTC). Known for his incisive insights and educational breakdowns, Shiller warns that Bitcoin’s momentum and trend could be on the verge of a significant shift to the downside.

The Alarming State of RSI and Awesome Oscillator

Cold Blooded Shiller highlights the Relative Strength Index (RSI), a crucial indicator measuring price movement speed and change. For the first time in 2023, the RSI’s midpoint appears to be in jeopardy.

This is a critical measure of who controls the market and where the stronger moves are likely to occur. Shiller compares the current RSI and Awesome Oscillator (AO) levels on Bitcoin to those of the Nasdaq ($NQ) back in January 2022, noting a striking similarity.

The Awesome Oscillator also shows signs of divergence, which has always been in an unusual spot. Shiller explains that the divergence won’t be “played out” until the AO crosses to the opposite side of the midpoint. At present, this divergence has not reached its climax, indicating a potential shift in momentum.

The famous Twitter analyst then moves on to discuss the market structure of Bitcoin, which he describes as an uptrend hanging by a thread. Market structure provides some of the best defense points, offering excellent risk-reward (RR) ratios for long positions near the last low. However, if these lows break, the price action could move quickly, leading to a sharp decline.

Shiller provides examples of previous instances when the market structure broke, emphasizing how protected these structures can be until they are lost. Once they are lost, the price action tends to move quickly, often leading to painful outcomes for traders.

Possible Outcomes and Educational Insights

Cold-Blooded Shiller concludes his thread by outlining the most likely scenarios for Bitcoin’s future. According to him, the most probable outcome is a downside impulse move, characterized by a large sell-off candle with no relief.

The second most likely scenario is a period of choppiness around the current low, allowing indicators to reset and leading to an uncertain future. The least likely outcome is a continuation of the uptrend, which Shiller believes would require a significant change in market forces, possibly news-related.

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Shiller adds that the RSI and AO are simple, but effective trend systems on higher time frames (HTF) for educational purposes. When their midpoints are lost or regained, it’s a significant event that traders should pay attention to.

Cold Blooded Shiller’s analysis paints a concerning picture for Bitcoin, with multiple indicators suggesting that a bearish turn could be imminent. Whether you decide to go long, short, or take a break from the market, Shiller’s insights offer valuable perspectives for navigating these uncertain times.

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Maxwell Mutuma
Maxwell Mutuma

Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.

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