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Bitcoin(BTC) traded near $77,260 Saturday after a $79,500 flash crash, while a seven-year RSI extreme raised warnings of a deeper correction toward $70,000.
Key Points:
- Bitcoin fell from around $79,500 to about $76,300 during a sudden weekend reversal.
- Four-hour RSI reached its highest level in more than seven years, signaling unusually strong momentum and possible short-term exhaustion.
- Traders are watching $75,000-$76,000 support, with upside scenarios near $83,000-$88,000 and deeper correction targets around $70,000-$72,000.
Bitcoin Flash Crash
Media reported Bitcoin near $77,260 on Aug. 22 after the cryptocurrency briefly approached $79,500 and then dropped to roughly $76,300. The reversal came after Bitcoin gained more than 22% during the previous week, leaving momentum indicators at unusually stretched levels.
The four-hour relative strength index reached its highest reading in more than seven years.
RSI measures momentum on a scale from zero to 100, with readings above 70 generally considered overbought. The article said the indicator had moved into the 80-90 range, where demand can become temporarily exhausted even when a broader uptrend remains intact.
The flash crash also liquidated more than $500 million in long positions within minutes, part of more than $1.35 billion in liquidations over 24 hours.
Krown RSI Warning
Krown said the extreme RSI reading was constructive for the longer-term trend but unfavorable in the short term. Ted focused on weekly structure, saying, “$BTC is holding above its weekly bull market support band. A weekly close above this zone is needed for more upside in Bitcoin.”
Other analysts see a growing risk that the latest expansion is near a local peak. CredibleCrypto said the lower-timeframe wave structure had become difficult to read and argued that a pullback could follow if the current upward move is complete.
The bullish case depends heavily on Bitcoin holding support around $75,000 to $76,000, which could leave room for a move toward $83,000 to $88,000. A loss of momentum after the overbought reading could instead expose the $70,000 to $72,000 area.
Before Saturday’s reversal, Bitcoin had already climbed more than 22% in one week and touched nearly $79,500, making the current RSI warning a test of whether that surge can consolidate without a deeper retracement.
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Source: yellow.com