Bitcoin RSI Slips Below 30 A Key Technical Signal

Bitcoin has just sent a signal that the market cannot ignore. After a brief surge above 70,000 dollars, Bitcoin sharply corrected in a fragile liquidity context, triggering a wave of massive liquidations. However, beyond this momentary volatility, a key indicator draws attention : the weekly RSI falls back to a level seen during the 2022 bear market. Between structural fragility and a possible echo of the previous cycle, the market finds itself at a strategic tipping point.

Reduced Liquidity

In a context of a sharp drop of the flagship crypto and Wall Street’s closure for Presidents’ Day, Bitcoin traded in thinned order books, encouraging abrupt and opportunistic moves.

The brief surge above 70,000 dollars was quickly erased, triggering a series of massive liquidations. Available data reveals :

• A BTC peak at 70,000 $ before a rapid retracement ;
• 120 million dollars of crypto liquidations in just four hours ;
• Liquidity blocks absorbed then replaced by new sell walls above the price ;
• A sequence described by Material Indicators as “breakouts and shakeouts”.

This setup reflects a market more vulnerable to moves by players with significant volumes. With thinner order books, simultaneous squeezes on long and short positions become more frequent.

Trader Daan Crypto Trades sums up the current climate : “Volatility is significantly higher, a phenomenon also observed in most other markets lately. Global markets are clearly not experiencing a calm period”.

The observed phenomenon therefore does not stem from a simple isolated incident, but from a global environment marked by increased volatility.

The Weekly RSI Returns to 2022 Bear Market Levels

Beyond these rapid movements, a foundational indicator now draws attention: the weekly RSI. Keith Alan, co-founder of Material Indicators, observes similarities with the previous bear cycle.

He states: “I increasingly see similarities with 2022 on the BTC chart, as the weekly RSI approaches historically associated levels, once per cycle, with lows in oversold territory.” The indicator stood at 27.8 on Monday, its lowest level since June 2022, below the 30 threshold traditionally considered as an oversold zone.

The analyst recalls that during the 2015 and 2018 cycles, a weekly RSI in the oversold zone marked a macroeconomic bottom. However, in 2022, this signal preceded five months of consolidation before the establishment of a true market floor for Bitcoin.

Keith Alan also tempers any hasty projection : “This does not mean that the evolution will necessarily be identical this time, but it is relevant to monitor carefully the similarities and divergences in the market structure to refine expectations.” The signal is therefore to be watched, without automatic conclusion.

In the short term, volatility remains the main market driver. In the longer term, the technical signal calls for caution without deciding the upcoming scenario. While history offers landmarks, it never dictates the outcome. Now, the Bitcoin price trades at a level where each move could redefine the cycle’s balance.