The world has been shocked by the advent of AI due to its incredible effectiveness. Today, AI-powered ChatGPT, an OpenAI creation, is known for its realistic answers to even the trickiest questions. As ChatGPT can be used to write articles and poems and handle multiple tasks with great accuracy, many wonder about its use cases in the cryptocurrency market.
ChatGPT is designed to provide Pine scripts (code) that are compatible with the trading view, paving an easy way for traders to develop their own trading strategies with 100+ indicators to identify the trend of a specific digital asset, such as Bitcoin.
Here Is How ChatGPT Responded To Bitcoin’s Price?
ChatGPT has been the headline in the crypto market as it has become a hot sensation in providing price prediction or technical analysis of a crypto asset. However, when the AI is asked for a market prediction, it vehemently refuses to provide any trading guru advice and advises traders to invest at their own risk. However, the AI can provide Pine scripts according to traders’ requirements and can be added to the chart on trading view to develop the best strategy.
Hence, Coinpedia asked ChatGPT to generate a pine script to identify the current trend of BTC. According to ChatGPT, if Bitcoin’s rate of change (ROC) is above 0.05, it signifies an uptrend and vice-versa. As Bitcoin’s ROC moves around 24, ChatGPT indicates an extreme uptrend in the BTC price chart.
However, ChatGPT’s pine scripts are not compilable yet to run on trading view, but one can train themselves to prepare analysis on the market. Coinpedia stretched its extent and experimented with ChatGPT’s analysis by asking to generate a script using RSI, Stochastic RSI, and Simple Moving Averages (both short and long).
With the given analysis from the platform, we compared it with Bitcoin’s price, and it hints at a downward correction ahead as the Stochastic RSI trades above 80, and the RSI-14 indicator is>70. Hence, ChatGPT advises exiting long positions as the current trend may bring downward volatility. Moreover, the smaShort crosses below the smaLong, which may push Bitcoin below $20K again.
On the other hand, ChatGPT suggests going for short positions if the RSI-14 drops and trades just above 50, keeping the Stochastic RSI same as before at 80. Traders may go for long positions again if both Stochastic RSI and RSI-14 drop below the level of 20 and 50, respectively, meaning Bitcoin needs to trade below $20K.