The Bitcoin RSI is once again drawing attention as BTC price movements reflect trends reminiscent of the 2022 bear market. During a US bank holiday, Bitcoin’s low-volume trading led to significant volatility, impacting both long and short positions.
Bitcoin RSI and Market Manipulation
In a period of thinner markets due to the holiday, Bitcoin price action showcased what experts call ‘breakouts and shakeouts.’ Data from TradingView highlighted sharp moves within a narrow BTC price range, peaking near $70,000. With Wall Street closed, larger entities easily influenced short-term price action, resulting in multiple liquidity squeezes.
According to CoinGlass, about $120 million in crypto liquidations occurred in the four hours leading up to the report. Bid and ask volumes were cleared, with new walls forming as prices dropped, exerting additional downward pressure. As trader Daan Crypto Trades observed, ‘Volatility is much higher, a trend seen across global markets.’
Comparisons to the 2022 Bear Market
Analyst Material Indicators referred to the current BTC price dynamics as indicative of ‘breakouts and shakeouts.’ An analysis of liquidity and whale activity on Binance’s BTCUSDT pair showed robust buying pressure, differing from the previous day except on OKX.
Keith Alan, cofounder of Material Indicators, noted similarities between the present scenario and the 2022 bear market, especially in the weekly RSI readings. He pointed out that Bitcoin’s Relative Strength Index (RSI) is approaching levels that historically signal a bottoming phase.
Weekly RSI and Price Predictions
On Monday, the weekly RSI measured at 27.8, the lowest since June 2022, suggesting an oversold condition. Historically, readings below 30 have marked significant price bottoms, as seen in 2015 and 2018. However, in 2022, it led to a prolonged consolidation phase before a macro bottom was established.
Alan emphasized the importance of monitoring these patterns, stating, ‘While it doesn’t guarantee a repeat of past trends, it’s crucial to identify similarities and deviations for better forecasting.’
As Bitcoin continues to play liquidity games, traders and analysts alike are keenly observing these metrics to navigate the volatile market conditions.
