Bitcoin and Ether Price Indicators Support Near-Term 'Relief Rally'

Bitcoin's weekly stochastic oscillator has turned up from oversold or below -20 levels, a positive sign for the cryptocurrency.

By Omkar Godbole

Jun 14, 2021 at 7:17 p.m. UTC

Updated Sep 14, 2021 at 1:11 p.m. UTC

relief new — Bitcoin traders may have hopes for a "relief rally."

Alex Thorn

Head of Firmwide Research

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Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Omkar Godbole

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Alex Thorn

Head of Firmwide Research

Galaxy

Hear Alex Thorn share his take on "Bitcoin and Inflation: It’s Complicated” at Consensus 2023.

Secure Your Seat

Price charts for bitcoin and ether might be turning bullish after a month of market stagnation, potentially offering respite in the coming weeks, a new analysis shows.

Bitcoin's weekly stochastic oscillator has turned up from an oversold level or below 20, signaling the possibility of a near-term "relief rally," according to Katie Stockton, founder and managing partner of Fairlead Strategies.
Seasoned traders use the oscillator in conjunction with other indicators to gauge oversold and overbought conditions, which act as triggers for long and short trade entries. A reading below 20 implies oversold conditions, while an above-80 print indicates an overbought market.
In bitcoin's case, the weekly stochastic's positive turnaround is accompanied by a buy signal on the daily and weekly chart DeMark Indicators, as noted by Stockton in a weekly research note. According to Investopedia, DeMark indicators compare the most recent maximum and minimum prices to the previous period's equivalent price to measure the demand of the underlying asset.
Thus, bitcoin appears poised for a more substantial relief rally – a price bounce due to seller exhaustion. The cryptocurrency is currently trading at 2.5-week highs above $40,000, representing an 8% gain on a 24-hour basis.
According to Stockton, an initial resistance for bitcoin is near $47,000, which, if breached, would open the doors for further gains. However, Pankaj Balani, CEO of Delta Exchange, expects fresh sellers to step in above $45,000.

Ether, the native token of Ethereum's blockchain, could also benefit from a shift in the price-chart indicators.

"The daily and weekly stochastics have turned up, supporting a near-term relief rally and test of initial resistance near $3,000," Stockton said.

The second-largest cryptocurrency has faced multiple rejections in the range of $2,800-$3,000 since late May.

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