I’ve made countless analyses in the past pointing out the high correlation between Bitcoin ( BTCUSD ) and the stock markets. In that context, I was running a few regressions of BTC against Dow Jones (DJI) in particular and found an indicator that has spotted all of Bitcoin’s historic market bottoms with 100% accuracy.

That is the rather undervalued Stochastic RSI . As this chart on the 1W time-frame shows, the 1W Stoch RSI of Dow Jones is currently on a slight pull-back having made an absolute bottom on the 0.00 reading in late February. Notice how all Stoch RSI swings at or near 0.00 have been market bottoms for Bitcoin: September 11, August 2015, January 2016, December 2018 and March 2020. When the RSI broke above the 20.00 level again it started a consolidation phase, which never looked back and eventually led to a parabolic rally.

As you may see, all initial breaks above the 20.00 Stoch RSI level, posted a pull-back soon after (red and green arrows). Once the pull-back was completed on the green arrow, the Parabolic Rally on Bitcoin started.

This is strong evidence that the market has made its bottom on the current Cycle. What we need to pay attention to now is when Dow’s Stoch RSI will reverse again. That will be the time that Bitcoin breaks upwards and won’t look back.

From a long-term investors perspective, Bitcoin’s current price level is a good of a buy as it can get. Wouldn’t you agree based on this correlation? Feel free to share your work and let me know in the comments section below!

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