BTC Surges Past $65K Following Tech Stock Recovery: Can This Level Be Sustained?
Following a robust recovery in US equity markets, Bitcoin surged beyond $66,000, recovering from the AI and technology sector selloff experienced on Monday. Can Bitcoin maintain support above $60,000?
The decline in Bitcoin's (BTC) price decelerated on Tuesday as United States equity markets bounced back from the selloff in artificial intelligence and software stocks that occurred the previous day. When the closing bell rang on US markets, the DOW had secured a 370-point increase, with the S&P 500 maintaining a 0.77% upward movement. The rapid rebound witnessed in US equity markets seems to have contributed to easing the downward pressure on cryptocurrency investors who were considering reducing their exposure to risk assets.
Market observers analyzing Bitcoin remain focused on emphasizing how critical it is for the previous support level at $65,000 to be recaptured and for $60,000 to maintain its position as support, with numerous experts indicating that a decline beneath the latter price point would rapidly trigger fresh lows within the low $50,000 territory.
Despite Bitcoin currently trading 49% below its all-time high, BTC market analytics platform Material Indicators identified a $4.5 million spot market purchase executed by "mega whales" during Tuesday's morning session. Within their analysis, Material Indicators acknowledged that although the amount may appear insignificant, "it's significantly larger than the typical $1M - $2M market order we see from that order class."
The platform further elaborated:
"We typically see them do this when they are buying directly into liquidity to help break walls."
Is Bitcoin Ready for a Turnaround?
At present, minimal indicators suggest an imminent reversal of the extended bearish trend, though market analysts are rapidly highlighting the extent to which Bitcoin has become oversold, referencing multiple data metrics that have historically represented inflection points in market sentiment and trader positioning when extreme levels were reached.
According to reporting from Cointelegraph, the weekly RSI for Bitcoin has dropped to 25.71, representing levels not witnessed since July, 2022. The chart presented below demonstrates that RSI measurements falling below 28 have historically provided attractive buying opportunities at discounted prices and served as early indicators that the market was establishing a bottom.
Alex Thorn, who serves as Galaxy's head of firmwide research, stated that Bitcoin is "nearing all-time oversold territory," further clarifying that the:
"Weekly RSI is lower than any time except the darkest of bears."
Additionally, Bitcoin finds itself within 9% of reaching its 200-week exponential moving average positioned at $58,855, a threshold that certain traders have identified as marking the beginning of the bottoming formation process during prior market cycles. Cryptocurrency market analyst Rekt Capital, conversely, presented a more pessimistic outlook.
In the analyst's assessment, the now validated daily closing price beneath the 200-EMA "could turn it into resistance on any upcoming recovery." Rekt Capital proposed that subsequent retests of this moving average would more likely "prompt additional bearish acceleration to the downside."
Even in the scenario where Bitcoin is currently on a trajectory toward establishing a bottom, the completion of this process may require numerous months. Based on the analysis provided by Bitcoin expert Brian Brookshire, "grinding out a bottom" is likely to be time-consuming, though some positive developments would include achieving equilibrium between the BTC supply in profit-loss metric, combined with "Bitcoin bouncing off mining cost."
Brookshire additionally referenced potential future interest rate reductions by the US Federal Reserve, whether implemented by Chairman Jerome Powell or the prospective future chair, Kevin Warsh, as factors that would significantly influence BTC price action.
