Bitcoin (BTC) is currently on the watch as it hovers around a significant reversal target of $70,000. This analysis emerges from a recent evaluation by the renowned trader, Rekt Capital, who suggests that this price mark could represent a strategic floor for BTC/USD, referencing historical price patterns and technical indicators.
Understanding the $70,000 Reversal Target
According to Rekt Capital, Bitcoin can experience a decline down to $70,000 without stepping outside its historical price behaviors. Utilizing the Relative Strength Index (RSI), an essential technical analysis tool, Rekt Capital deduced potential downside scenarios for Bitcoin’s price.
Historically, whenever Bitcoin’s Daily RSI drops below 28, it does not necessarily signal the price bottoming out. Rekt Capital elaborates, stating that actual bottoms have historically occurred between 0.32% to 8.44% lower than the initial RSI low point. He notes, “Currently, Bitcoin is forming its second low at 2.79% below the initial low; a similar pattern could position the price around $70,000.”
BTC/USD 1-day chart with RSI data. Source: Rekt Capital/X
The RSI serves as a pivotal leading indicator, displaying signals that often precede significant price movements in the cryptocurrency landscape. The levels of 30, 50, and 70 are critical thresholds, where scores below 30 indicate ‘oversold’ conditions, while scores exceeding 70 signal ‘overbought’ territories.
As of now, Bitcoin’s daily RSI is measuring around 38, down from a rejection at 50. Furthermore, the weekly RSI is at 43, marking its lowest point since the new bull market commenced in early 2023, as reported by Cointelegraph Markets Pro and TradingView.
BTC/USD 1-week chart with RSI data. Source: Cointelegraph/TradingView
Moreover, it is essential to recognize that Bitcoin’s price may not necessarily touch the $70,000 level for a long-term bottom to materialize. Rekt Capital pointed out that the RSI trends seen in the current cycle suggest a range from the present price to $70,000 could likely act as the bottom for this correction.
BTC/USD was last observed at $70,000 in early November 2024, aligning with its previous all-time high marked during the prior bull market.
Macro Economic Context
Despite the potential for stabilization at the $70,000 mark, experts continue to caution against the overall bearish sentiment related to macroeconomic trends. Timothy Peterson, a well-known network economist, expressed concerns about the current direction, predicting that adverse market conditions could easily propel BTC/USD downward to the $70,000 range.
The ambiguity surrounding Bitcoin’s trajectory warrants a closer examination of external economic factors and historical data to manage potential investment risks effectively.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
