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Bitcoin has fallen significantly in the past 24 hours, trading around $63,000 after a daily drop of about 5%, with its market value falling to less than $1.3 trillion.
This performance came under multiple pressures, including geopolitical tensions negatively impacting market risk appetite.
Despite this negative scenario, some analysts point to technological developments unprecedented in the currency’s history.
The relative strength index (RSI) on the 10-day time frame has entered oversold territory for the first time since Bitcoin’s launch.
This indicator measures the speed and magnitude of price changes and ranges from 0 to 100. A reading below 30 indicates a possible oversold condition before an upward rebound, while a reading above 70 reflects overbought conditions.
Some observers believe that technical indicators may exhibit unusual behavior in the next phase, while emphasizing that the RSI should not be used as a single signal but within a comprehensive set of indicators to improve the accuracy of readings.
On the other hand, the Market Value to Realized Value (MVRV) index is approaching all-time low levels.
This indicator compares the current market value to the average price at which investors purchased the currency.
Based on available data, readings below 1 generally correlate with bottom territory, while readings above 3.7 indicate a price peak.
The index fell last week, closing near 1.18, which strengthens the possibility that the market is approaching an important support area.
On the other hand, signs of caution remain.
Digital asset investment funds have recorded significant outflows in recent weeks, with Bitcoin spot trading funds seeing billions of dollars in withdrawals, likely reflecting ongoing selling pressure.
The amount of Bitcoin held on trading platforms has also increased recently, a move that is often interpreted as a preliminary indicator of a potential sell-off.
Between technical indicators leaning towards the positive and ongoing market pressure, Bitcoin’s direction remains dependent on the ability of buyers to regain momentum in a macro environment still characterized by volatility and uncertainty.
Also read:
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Bitcoin enters a stage of psychological torture: is the crash scenario still valid?
