Question #435 ·
How do momentum indicators like RSI and MACD suggest caution in Bitcoin’s current price action?
- MACD readings predict exact future Bitcoin prices by using historical price data.
- RSI and MACD primarily measure Bitcoin’s on chain idle supply changes daily.
- Elevated RSI and bearish MACD crossovers signal weakening momentum and price reversal. Right answer
- High RSI values indicate guaranteed upward trends without any risk of decline.
Why is this the correct answer?
This is correct because the Relative Strength Index (RSI) measures overbought conditions, and high RSI readings suggest the market may be overextended. The MACD shows trend shifts through crossovers, with bearish crossovers occurring when the MACD line falls below its signal line. Together, these momentum indicators warn that upward trends are losing strength and that a price pullback or reversal could follow, helping beginners avoid buying at market peaks.