Bitcoin Market Analysis

• Bitcoin is currently priced below $90K, with the RSI indicating potential for significant price drops.
• Key support levels to monitor are $84K and $76K; a break below these could lead to further declines.
• RSI reveals weak momentum, and traders are closely observing whether Bitcoin will replicate previous patterns.

Bitcoin’s technical indicators show a bearish divergence on the weekly RSI chart, historically linked to market corrections. At $88,643, Bitcoin has recently dropped 7.95% over four days, raising concerns of a deeper correction.

RSI Divergence Indicates Potential Weakness

There are numerous instances where Bitcoin’s price surged while RSI levels did not match earlier peaks, signaling possible warning signs. Significant declines often follow such divergences. In 2021, when Bitcoin surpassed $69K, it encountered a subsequent major downturn, later plunging under $16K by late 2022.

A similar situation unfolded in May 2024, where despite Bitcoin exceeding $100K, the RSI formed a lower peak, suggesting the potential for a more severe retracement. Currently, RSI levels are near 50, indicating recent bullish momentum may have reached its peak.

Critical Support Levels in Focus

The significance of Bitcoin staying above critical support levels cannot be overstated. Below $84K—a previous resistance point—a critical zone is established around $76K. If either support level fails, Bitcoin could potentially dip toward levels around $60K. Conversely, if it remains above $84K, a corrective rally could occur.

Market Sentiment and Outlook

Traders are on guard as Bitcoin’s recent RSI divergence echoes prior patterns linked to downturns. While some speculate this cycle may differ, technical indicators advise caution. A decisive break below support could confirm another bearish phase akin to 2021.

As Bitcoin’s price action parallels historical cycles, anticipation for heightened volatility grows. The future path of Bitcoin remains uncertain, and traders are urged to remain prudent.