Bitcoin's RSI Hits 85: Analyst Says This Is Not a Bear Market Rally

A technical analyst has identified a significant pattern in Bitcoin's price history that suggests the current rally is more likely to be the start of a new uptrend rather than a bear market bounce.

The analyst, Sykodelic, pointed out that Bitcoin's daily relative strength index (RSI) has never reached 85 or higher during a bear market. The RSI is currently above 85, having pushed past this level after the asset reached above $81,000.

Sykodelic compared the current price structure to November 2024, when Bitcoin's daily RSI also reached 85. He described the pattern as 'vertical accumulation,' where the price moves into overbought territory, followed by a rally with few entry points and a higher continuation while traders expect the price to drop again.

The analyst noted that derivatives activity has also picked up, with Bitcoin open interest on Binance reaching its highest level in three months at around $9.54 billion. However, this increase in open interest could also raise liquidation risk if the price reverses.