Crypto markets have recovered by about 50% since Bitcoin’s collapse. According to a recent Binance report, BTC had a V-shaped recovery and over 70% from its lows. But, many are still wondering if it is still oversold and whether it is not time for a Bitcoin price drop considering the Relative Strength Index (RSI).
Sentiment among the top Bitcoin traders remains mixed. This after the BTC price rose 5% to hit the resistance level of $ 7,200. Even more confusing for many is that hours later it lost 5% of its value. Specifically, there was a net change of -356.02 USD.
This loss represents a setback, coming after having ended its longest weekly winning streak in nearly a year last week. Nonetheless, most major traders are convinced of the likelihood that Bitcoin’s price will hit $ 7,700 in the short term.
Analyzing RSI to assess Bitcoin’s price drop
The Binance report analyzes the Relative Strength Index (RSI) to identify oversold conditions in BTC. This is an indicator that assesses overbought or oversold conditions in the price of an asset. The RSI is displayed as an oscillator and can have a reading from 0 to 100.
In March there was a drop in the RSI to a low of 15, suggesting extreme bearish sentiment in BTC. The RSI also indicated that prices have fallen into extremely oversold territory during this period. In fact, the indicator marked its lowest value since November 2018.
Many investors were optimistic as the RSI had surpassed the 50 level, thanks to the recovery of more than 70% of the BTC price after the collapse. However, this failed to completely break resistance levels.
The truth is that today the RSI is at 47.90, with ample possibilities to drop. We are facing a weakened RSI, almost as if Halving is not going to happen in less than a month. Continuous readings below the 50 threshold would suggest that further downward pressure is yet to come.
What do the experts say?
At the moment, it appears that a Bitcoin price correction is yet to occur, if we take into account the RSI readings that seem generally pessimistic.
BitMEX CEO Arthur Hayes recently wrote that he could see Bitcoin retest $ 3,000. He attributed this thought to the fact that in a global bear market, the correlation between all assets approaches one. You can find this in the April issue of “Crypto Trader’s Digest”, the sporadic newsletter written by Hayes.
Placeholder Capital’s Chris Burniske said that if we see another “sell it all” moment in global markets, “Bitcoin will not be saved.” Therefore, consider that then there are any minimum amounts in the $ 5,000, $ 4,000, and $ 3,000 that Bitcoin could hit.
Conclusions and recommendations
At this point, a tip for readers is to stay on top of critical resistance and support levels to identify Bitcoin’s next big move.
For example, key resistance levels, such as the $ 9,000 mark, where a clear advance would indicate that the cryptocurrency market is back on track. Otherwise, key support levels at $ 6,000 would be a tipping point to support any sustained bullish momentum in BTC.
Speaking of the big picture, There are indications that stocks are about to move down after a strong recovery. This is because as you notice the data on rising unemployment and contracting corporate earnings, there will be another level of panic.
Thus, an episode of “sell everything” if possible, which could affect Bitcoin just as it did in March.
For now, BTC is expected to continue lowering to the zone of 5,850 USD. However, an interesting point is the one proposed by Matthew Dibb, co-founder and COO of Stack.
According to Dibb, despite the downward view, we can also expect a price level of $ 8,000 in the coming weeks, due to the catalytic effect of Halving for the continued appreciation of Bitcoin.
What do you think? Can hope be maintained in the effects of Halving or is this downward alert the exit signal before chaos?