Mar 18
Powerful RSI Trading Strategy You need to Know
- This Unknown Pattern on RUNE Chart Calls for a Bullish Reversal
- AAVE 2.5 Months Trendline Breakout Calls for a Reversal
- Powerful RSI Trading Strategy You need to Know
This Unknown Pattern on RUNE Chart Calls for a Bullish Reversal
THORChain (RUNE) could be headed for a bullish reversal bottom if this very unique chart pattern holds up. Cryptocurrency RUNE is also one of the top-performing coins, with over 21% gains over the past week. Most traders are familiar with the Head and Shoulder pattern, but most aren’t aware of the “crooked” version of the same H&S pattern known as the Quasimodo chart pattern.
Quasimodo Chart Pattern
The RUNE daily chart displays the Quasimodo chart pattern as the price is rising. The key difference between the two patterns is that the left peak of the Quasimodo is much higher than the right peak, and the valleys are also out of sync.
Basically, the price is starting printing higher highs and higher lows, which is a break in the market structure that signals the development of an uptrend.
RSI Momentum
The RSI oscillator is also holding up above the 50 mid-level, which signals bullish momentum behind the current rally. Please note that the RSI first broke above the 50 level on February 28, and since then, we have had a successful retest of the mid-level that held. The price also followed with a bounce confirming strong buying activity.
Looking forward: Short-term, the break of key resistance at the $6.00 level can open the door for a retest of $8.40 level, which aligns with the 200-day simple moving average.
AAVE 2.5 Months Trendline Breakout Calls for a Reversal
AAVE was the best performing crypto in the last 24 hours, gaining almost 13%. AAVE’s gains are no coincidence as they came as a result of a classical trendline breakout signal that has the potential to signal a bottom.
Trendline Breakout
This is a fairly notable trendline because of its age and because it connects all the peaks printed in 2022. The breakout can signal a major shift in the market sentiment, but the bulls still need to clear the next major hurdle that comes around the $150 — $159 SR zone.
RSI Momentum
Yesterday was a big reversal day that was followed by a break of the RSI oscillator above the 50 mid-level. In mid-January and at the beginning of February, we had two failed attempts to break above the RSI 50 level. However, the sizeable bullish candle printed yesterday can signal that the outcome would be different this time.
Looking forward: If the bulls manage to clear the $150 big psychological number, it will open the door for a possible test of the 0.382 Fibonacci retracement level, which perfectly aligns with February’s peak. Ideally, we want the RSI oscillator to hold above the 50 mid-level to increase the chance of the current rally to extend.
Powerful RSI Trading Strategy You need to Know
The Relative Strength Index (RSI) is a versatile technical indicator that can help crypto traders capture both short-term and swing trading opportunities. Throughout this trading guide, you’ll learn a proven crypto trading strategy for swing trading in four simple steps.
RSI Strategy for Crypto Trading
The standard RSI overbought/oversold signals and bullish/bearish divergence signals are overrated. As such, it’s essential to learn new trading tactics that can be more efficient in spotting when a new trend is about to start.
Here, we go over the four simple steps to capture bullish RSI swing signals:
- The RSI oscillator must fall into oversold territory below the 30 level.
- Secondly, the RSI oscillator must bounce back above the 30 level.
- Thirdly, the RSI oscillator needs to pull back without breaking below the 30 level.
- Lastly, buy when the RSI oscillator breaks above the RSI peak following the pullback.
Since the RSI oscillator is a leading indicator, it means that the RSI breaks in advance the corresponding swings high/low on the underlying price chart.
Bottom Line: The RSI is a powerful technical indicator that works well during trending market conditions and is an excellent tool to find swing trading opportunities. Remember that the markets are not perfect, so don’t expect to hit the jackpot every time one of these swing trading opportunities comes around.
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