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The Bitcoin price saw further decline late on Thursday and Friday, falling to $78,400 before a marginal bounce back.
BTC has now extended its losses to 18% since the weekly open.
However, Bitcoin’s Relative Strength Index (RSI-14) has dropped to its lowest level since August 2023 and entered the “oversold” territory, in both the daily and 4-hour timeframes.
With market sentiment deeply bearish, as reflected in the Crypto Fear and Greed Index, analysts anticipate a potential local bottom forming soon.
Bitcoin RSI Oversold, Forms Bullish Div In The 4-Hour Timeframe
Bitcoin’s RSI has plunged into ‘oversold’ territory at an unusually fast pace, indicating a potential overreaction from investors.
Take, for instance, its trajectory after Bitcoin peaked in November 2021 at $69,000, indicated by the blue vertical line in the chart below. The daily RSI did not fall below 30 until BTC saw over 50% correction from its all-time high.
Today, Bitcoin is trading just 27% below its all-time high, and its daily RSI has already fallen to 21.
The last time BTC’s RSI dropped this low was in August 2023, when Bitcoin traded at just $25K. Before that, it was during the FTX crash in November 2022. Given that the current market conditions are far less severe, analysts argue that investors may be overreacting, front-running every bearish macroeconomic headline.
Prominent analyst Merlijn The Trader highlights that the Bitcoin RSI is also oversold on the two-day chart. On the last two occasions this happened, BTC surged 90% and 175%, respectively.
More importantly, the Bitcoin price is already forming a bullish divergence in the 4-hour chart and could see a strong bounce in the coming days.
Buy The Bitcoin Dip At This Price
There is a growing consensus among smart-money investors that the Bitcoin price could bottom out in the $72k – $74k zone.
However, smart money investors have already begun DCAing into BTC, anticipating the possibility that the price may not drop as low as expected, potentially leaving most willing buyers sidelined.
Prominent analyst Daan Crypto Trades reveals that nearly $1.8 billion in bids have appeared between $70k and $79k on Binance’s futures marketplace alone. Deep-pocketed investors are already buying the Bitcoin dip.
If Bitcoin is still in a bull market, it will successfully retest the 50-week Simple Moving Average, an indicator it hasn’t fallen below since March 2023. The 50-week MA is currently at $74,700, which would be the perfect entry point for sidelined investors.
Bitcoin Beta Bets Also In High Demand
Bitcoin has outperformed most altcoins in this bull cycle. While Ethereum is expected to show bullish strength, investors don’t expect BTC to show tepid price action. Many project that the BTC price could hit $150,000 in 2025.
Unsurprisingly, smart money investors are buying beta bets on Bitcoin. It is not without any reason that BTC Layer-2 token Stacks (STX) is up by nearly 10% since this week’s low.
Similarly, a new meme coin, BTC Bull (BTCBULL), is in high demand and has raised nearly $3 million in short order.
BTC-themed meme coins are rare, making them an attractive investment for traders tired of the scams on Solana.
However, its key selling point is its promise of free Bitcoin. The project is built on the foundation that BTC is undervalued at its current price and will hit $250,000 in the mid-term and $1 million in the long term.
As a result, BTCBULL holders will earn Bitcoin airdrops when the BTC price hits certain set milestones. They will also benefit from BTCBULL airdrops and token burn events, on top of the staking rewards that early presale buyers are already stacking.
With a plethora of monetary perks in store, it is no surprise that BTC Bull is in high demand. Smart money investors are bullish on its upside potential, with many calling it the next 100x crypto.
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