Bitcoin investors have had a tough summer, with the price of Bitcoin remaining largely stagnant. However, short-term traders may be able to take advantage of the situation.
The Relative Strength Index (RSI) offers a great opportunity to capitalize on Bitcoin’s range-bound price. When the RSI reaches values above 70, it indicates that the market is overbought and will likely decline. On the other hand, when the RSI falls below 30, it indicates that the market is oversold and the price should increase.
The chart below shows the RSI’s performance on Bitcoin during the summer months.
Bitcoin chart by TradingView
This strategy should be used with caution, however, as it can be disastrous if the market trends rather than stays in a range. As such, speculation should be done with small-size positions and with tight money management rules.