Bybit CEO Ben Zhou has suggested that the entire cryptocurrency market experienced a considerable liquidation amounting to approximately $10 billion. Bitcoin’s price took a hit on February 3rd, dropping by 6.6% and causing an 11.7% decrease in the total crypto market capitalization.
The implementation of Trump’s trade tariffs created turmoil in financial markets, triggering a ripple effect that reached the crypto sphere. Nonetheless, BTC has managed to rebound by slightly over 8%, reclaiming a critical support level.
Decoding Bitcoin’s RSI Behavior…
The Relative Strength Index (RSI) gauges an asset’s momentum during the preceding 14 trading periods. An RSI above 70 indicates that the asset is overbought, whereas a reading below 30 suggests oversold conditions.
On January 3rd, the 4-hour RSI dramatically dropped to 19.76. Previously, similar readings below 25 were recorded in December and as low as 16 in early August when BTC’s value slipped from just below $60k to $49k.
Bitcoin’s recent performance has been promising, with the price maintaining a range between $92k and $106.2k over the past two months. Presently, the support level at the mid-range price of $99.1k has held firm.
After testing the $92k support zone, Bitcoin swiftly bounced back, touching $102.5k. The RSI has moved back above the neutral 50 mark and, although it has slightly dipped by 3% in the past few hours, it remains positioned above the mid-range level.
While key support zones have been maintained in price movements, the On-Balance Volume (OBV) has depicted a new lower low compared to the previous month, signaling a rise in selling volume, tilting the bias towards the bears.
Analysis of the 24-hour liquidation heatmap indicated that immediate targets were at $97.5k and $94k. Despite this, Bitcoin’s prompt bullish response is seen as a positive signal for investors.
However, a potential dip towards the $94k-$95k range cannot be ruled out, and traders should stay prepared.
Disclaimer: The views expressed are solely the writer’s opinion and do not constitute financial, investment, trading, or any other form of advice