- Bitcoin’s RSI dropped to oversold, signaling a potential price recovery.
- Bitcoin bounced 8%, reclaiming key support at $99.1k after a 6.6% drop.
- Despite the rebound, Bitcoin faces challenges around $94k-$97.5k support zones.
On February 3rd, Bitcoin—BTC, experienced a sharp 6.6% drop, causing a massive 11% market cap loss. Trump’s trade tariffs sparked fear in financial markets, sending tremors through the crypto world. Since then, Bitcoin has bounced back, gaining over 8% and reclaiming a vital support level. As the market stabilizes, many are asking: Is Bitcoin ready for a full recovery?
Bitcoin’s RSI: Key to Understanding the Price Action
The Relative Strength Index is a crucial tool in understanding Bitcoin’s momentum. It helps determine whether Bitcoin is oversold or overbought. A reading below 30 signals oversold conditions, while anything above 70 means overbought. On January 3rd, Bitcoin’s 4-hour RSI plummeted to 19.76, a worrying sign. This drop mirrored previous dips in December and August, when RSI values reached 25 and 16. In those cases, the price quickly followed with sharp declines.
What’s Next for Bitcoin?
At press time, Bitcoin remained within a price range of $92k to $106.2k, respecting key support zones. The $99.1k mid-range level served as a solid foundation, allowing Bitcoin to bounce back. The price touched $102.5k, with RSI moving above neutral 50. Although there was a small 3% dip, Bitcoin stayed above important support levels.
Despite Bitcoin’s recovery, the On-Balance Volume has made a lower low, showing that more selling occurred over the past 36 hours. This suggests the bears may have the upper hand for now. The liquidation heatmap indicates that Bitcoin may face challenges around $97.5k and $94k. Even so, the swift rebound from Bitcoin is a good sign for the future.
However, traders should remain cautious, as a dip to the $94k-$95k range could still happen before the recovery truly kicks in. Bitcoin’s bounce from oversold conditions shows promise, but the market remains volatile. Investors should keep an eye on support zones for more signals of strength or further declines.
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