Analyst BTC price will experience a V-shaped rebound, RSI has reached a 5-year low point.
BTC price to have V-shaped rebound, RSI at 5-year low.
Author: WILLIAM SUBERG, COINTELEGRAPH; Translation: Song Xue, LianGuai
On August 22nd, BTC stubbornly went against the trend, with $26,000 becoming a magnet for the daily price movement of BTC.
BTC/USD 1-hour chart. Source: TradingView
BTC’s “Death Chop” Returns
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Cointelegraph Markets Pro and TradingView track the sideways performance of BTC/USD for the third consecutive day.
Despite being severely oversold, Bitcoin has refused to show any form of recovery rebound from its levels two months ago, according to the relative strength index (RSI) reading.
Market participants are anxious, and renowned trader Yeler referred to the intraday trend as the “Death Chop”.
Material Indicators said, “At this stage, it feels like a ‘game of chicken’ to see who will take action to break the deadlock.”
Material Indicators analyzed the liquidity of the Binance BTC/USD order book and found widespread lack of liquidity, increasing the possibility of large fluctuations in either direction.
“The market is waiting to see if it will attract more liquidity bids or more inquiries.”
“So far, we have seen a small amount of liquidity bids rise from around the active trading area of $20,000, but no significant liquidity (new or transferred) has been stacked to defend prices from lower lows.”
Nevertheless, this could be very serious for the bulls, as lower lows (LL) could even threaten the support level of $20,000 in the future.
Binance annotated chart of BTC/USD order book data. Source: Material Indicators/X
RSI reinforces the “V-shaped recovery” theory
Looking ahead, Bitcoin still has the potential to salvage its overall upward trend.
In a YouTube update on August 22nd, Michaël van de Poppe, the founder and CEO of trading company Eight, pointed out the severe oversold signal generated by the RSI.
At the time of writing, within a 12-hour range, the RSI was below 19, close to the lowest level since the bottom of the bear market in 2018. The daily level was similar, reaching the lowest level since the crash in March 2020.
Referring to previous BTC price crashes, Van de Poppe said, “Every time we see such a trend, there is some kind of V-shaped recovery and a balance is found at higher levels.”
He added that Bitcoin is “likely” to make a comeback, with the next focus being $26,500 or higher.
BTC/USD 12-hour chart with RSI. Source: TradingView
“The current price trend of #Bitcoin reminds me of September 2020, just before the last bull market started,” Jelle said.
“For a period of time, it absorbs and gradually rises—I can see similar results.”
BTC/USD comparison chart. Source: Jelle/X
