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Bitcoin’s Relative Strength Index has climbed above 80, reaching readings near 84 to 86, territory the asset hasn’t touched since November 2024. The move came on the back of a violent short squeeze that liquidated more than $3B in short positions within a single 24-hour window, forcing a cascade of buying that sent prices rocketing toward $80K.
What happened
Bitcoin broke out of a consolidation range between $62K and $71K that had held for weeks. Prices surged roughly 8% to 12% within just one to two days, reaching multi-month highs near $79.5K to $80K before settling into a range around $77K to $77.8K.
The catalyst was a textbook short squeeze. Over $700M in short positions were cleared in a matter of hours, and the total liquidation figure crossed $3B in a single session.
The Crypto Fear & Greed Index, which had been sitting at depressed levels around 34 not long ago, jumped into “Greed” territory with readings between 62 and 72.
Why overbought doesn’t always mean overcooked
During strong bullish trends, Bitcoin’s RSI has stayed elevated for extended periods, sometimes weeks. The November 2024 overbought reading didn’t mark a top. It marked the beginning of a broader move higher that played out over the following months.
The speed of this particular move does stand out. An 8% to 12% surge compressed into one or two days, fueled primarily by forced liquidations rather than organic spot buying, creates a price structure that can be fragile.
What to watch from here
The key level to monitor is whether Bitcoin can hold the $77K range or whether prices slip back toward the top of the previous consolidation zone near $71K.
For traders with existing positions, the historical precedent is cautiously encouraging. Overbought conditions during strong trends have more often led to further gains over six to twelve month windows than to immediate reversals.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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