Seasoned trader and analyst Tone Vays says that a Bitcoin (BTC) pullback below the key psychological area of $20,000 is now unlikely to transpire.
Vays tells his 123,000 YouTube subscribers that the chances of Bitcoin falling below $20,000 has been drastically reduced after BTC rallied above $22,000 today.
“If [Bitcoin] goes back above yesterday’s swing high [$21,650], I think going sub $20,000 now becomes very, very, very unlikely.”
Looking at the weekly chart of Bitcoin, Vays says that one indicator suggests that BTC has more upside potential in the long term.
“The RSI [relative strength indicator] is very, very good. The RSI has plenty of room to the upside. It has not even broken its prior swing high. So the weekly RSI is still barely bullish.”
The RSI is a momentum indicator traders use to spot potential reversals in trend or trend continuations.
Vays also believes that Bitcoin has likely printed its bear market bottom in November when BTC plunged below $16,000.
“The funding rate told you that ‘Hey, this is probably the bottom,’ just because of the BitMEX funding rate… Their funding rate is actually an amazing indicator. To me, this indicated that the low is likely in, not definitely in, but likely in.”
Market participants keep a close watch on the funding rate as it shows whether traders are overly bullish or bearish on crypto. Extremely negative funding rates, similar to what was witnessed in November 2022, suggested that traders were heavily betting that crypto would continue to fall, which was a setup for a strong reaction in the opposite direction.
At time of writing, Bitcoin is changing hands for $22,555.