coindesk.com
Bitcoin and ether started the working week at technically oversold levels and ended it at the precipice of overbought levels.
The two largest cryptocurrencies by market capitalization weathered bank failures, inflation concerns and ETH selling pressure to ride higher. Bitcoin was recently selling at about $26,780, up more than 30% over the past seven days, with much of its gains occurring since Monday. Ether has climbed about 21% over the same period.
Both assets made abrupt turns at the technically oversold Relative Strength Index mark of 30 on March 11, and accelerated their move higher following assurances by the Federal Deposit Insurance Commission (FDIC) that Silicon Valley Bank depositors would be made whole.
Bitcoin and ether now show RSI’s of 70.7 and 61 respectively, moving them to the edge of the traditionally overbought reading of 70.
Historically, bitcoin has continued to perform well even when reaching overbought levels. Data dating to 2015 shows 408 occurrences where bitcoin’s RSI broached 70. Its average 30- day performance following an occurrence was a 13% increase.
Ether’s average performance was a less robust 3% return after 30 days, highlighting that bitcoin has tended to trend higher when technically overbought, while ETH has been more prone to trim gains.
The two assets remain tightly correlated to each other implying that investors still view them in a similar fashion, despite their stark differences in how they’re used. .
BTC and ETH’s performance ranked them fifth and seventh among cryptocurrencies with a market cap of $1 billion or more.
Leading the pack was Stacks (STX), the layer 2 bitcoin protocol, which finished up 75%. Immutable X ranked second among the group with a 69% increase.
All but one of the assets on the list finished in positive territory, with LEO the lone asset to decline over the most recent seven days.
Next week, investors will be focusing on Wednesday’s Federal Open Market Committee’s (FOMC) interest rate decision, currently favored to result in a 25-basis point increase. Little significant data is likely to change expectations before the announcement. Investors will likely pay special attention to the FOMC’s economic projections as they will show the reasoning behind the FOMC’s decision.
Whether the recent decoupling from traditional financial indexes holds next week, will also be interesting to see.