The Bitcoin Relative Strength Index (RSI) has hot bear market lows as the Bitcoin Fear and Greed Index drops to extreme fear.
BTC was battered by volatile price action on August 5 amid a series of negative developments across the global financial market. The price dropped by double digits before a recovery above $54,000 during the US market.
Bitcoin was trading at $55,544 as of 04:28 a.m. EST after a 5% gain in 24 hours.
Bitcoin Price Analysis As RSI Drops To Bear Market Lows
Bitcoin price has bounced from below $50K to above $55K in the last 24 hours, marking a bold recovery after yesterday’s crash. The recent selling pressure saw the RSI drop to one-year lows, with analyst @CryptoRover saying that the trend could mark the start of an epic rally.
Despite the recent price changes, technical indicators are yet to flash bullish. The Bitcoin Moving Average Convergence Divergence (MACD) line is below the signal line, indicating a downtrend.
As seen in the chart above, the MACD histogram bars are red and growing longer despite the price increase. This trend shows a potential bearish divergence, and the uptrend may weaken. It also shows that the market remains uncertain of Bitcoin’s price action in the short term.
With the risk of a potential reversal on the horizon, traders should watch out for the key support level of 100% Fibonacci at $53,485. Failure to hold the price above this level risks a further downtrend to $43,240.
Trader @DaanCrypto on X notes that the uncertainty could see Bitcoin trade within a range for weeks. While the price has yet to carve out this range, the analyst estimates that it could be between the $52,600 and $58,000 level.
The key resistance levels for Bitcoin are $59,824 and $61,782. A breakout above these levels could see BTC’s price head towards $70,000.
Institutional Interest In Bitcoin Remains High
Despite BTC’s volatile price action, institutional interest in the coin remains notably high. In the US, spot Bitcoin exchange-traded funds (ETFs) are garnering interest, having amassed $48 billion in total assets according to SoSoValue data.
Recently, reports indicated that the largest wealth manager in the US, Morgan Stanley, was considering allowing select clients to access the spot Bitcoin ETFs issued by BlackRock and Fidelity.
Besides the US, European financial firms are also getting exposure to Bitcoin. The fourth-largest investment manager in Europe, Capula Management, disclosed holding $500M in spot Bitcoin ETFs.
Such accumulation shows that large investors and institutions are optimistic about the long-term value of Bitcoin despite regular bouts of panic from the retail market.
