Bitcoin’s momentum was brought to a halt with its 4-hour Relative Strength Index (RSI) sliding to levels not last seen since last August. On February 3rd Bitcoin dropped by 6.6% which then caused major price decreases across the entire crypto market.
According to Bybit CEO Ben Zhou, total liquidations across the crypto community were nearly $10 billion, with the whole crypto market cap down significantly by 11.7%. Investor doubt increased due to investor concerns about macroeconomics with Trump’s trade tariff implementation.
Bitcoin Rebounds 8% After Sell-off, Retains Key Support Levels
The sell off was not strong enough to keep Bitcoin down, because it quickly rebounded, adding 8% and recapturing a key support level. The price bounced to touch $102.5K resistance while supporting on the $92K support zone despite the bearish pressure.
Key momentum indicator the Relative Strength Index (RSI) slid to 19.76 on February 3rd, a level which was far below what is considered oversold at 30. This arrives as it is one of the lowest readings since early August, when BTC hit $60K and breached to $49K.
But Bitcoin’s quick recovery did not let the two month trading range of $92K-$106.2K resolve. BTC continued holding above the $99.1K mid-range support at press time, although it faced minor retracements as it plunged 3% in the last few hours.
Support Zone Key for Bitcoin Bulls as Market Volatility Continues
There has been a strong reaction to Bitcoin but on chain indicators indicate increasing selling pressure. The On Balance Volume (OBV), that tracks buying and selling momentum, has created new lower low indicate that buyers are not yet back in control.
By looking at the liquidation data, potential downside target levels are suggested to be $97.5K and $94K, and traders are cautious. Bitcoin’s swift bounce is a good sign, but analysts are also advising that another dip to $94K-$95K is coming.
For now, the support zone for BTC bulls is key and if they fail to prevent the asset from moving deeper into the downside then volatility is likely to continue in the coming days.
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