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A trader on X summarized the situation:
“The price of Bitcoin has stalled since those coins started moving.”
Why is Bitcoin’s RSI plummeting? What are the signs of recovery?
The RSI (relative strength index) measures the overbought or oversold levels of an asset relative to a specific period. In the last few hours, the value of Bitcoin’s RSI has plummeted to just 6/100 on the 15-minute timeframes, a level practically never seen for Bitcoin and considered a strong oversold signal.
An analyst stated:
“Never seen BTC so in oversold territory. Never. This goes beyond oversold.”
However, a bull divergence is emerging: while the price continues to mark lower lows, the RSI now shows higher lows. This pattern is often interpreted as a possible leading signal of trend reversal.
In detail, the hourly chart (BTC/USD) oscillates around the 30/100 threshold, considered typical for oversold areas. This behavior suggests that the worst may be behind, with operators already on the hunt for recovery signals.
What does the 500 million dollar liquidation of Galaxy Digital mean?
When an institutional operator like Galaxy Digital dumps large quantities of BTC on the exchanges, the market is hit by a double wave: on one side, the selling pressure lowers prices, and on the other, it generates panic and a rush to liquidation. The reported movement affected assets held for over fourteen years, thus considered “Bitcoin OG” (Original Gangster), meaning they belong to the first miners or hodlers in the history of the cryptocurrency.
This event caused enormous liquidations in the derivatives and spot market. In 24 hours, the estimates cited by the source confirm the movement and sale of over 500 million dollars of BTC, affecting the already delicate liquidity on the exchanges.
The dynamics are exacerbated by the fact that, historically, the reactivation of these “old” wallets often coincides with scenarios of extreme volatility, as the market is unprepared to absorb such massive quantities in just a few hours.
How are traders reacting and which levels should be monitored?
The analysts are focusing on the ability of the buyers to absorb the spot supply. In fact, the survival of any lows depends on how much demand is willing to intervene, especially in the 114,500 dollars area identified as the first critical support level.
On the contrary, the 118,500 dollars range is filled with hordes of sellers (ask), creating a cloud that could contain rebound attempts. Experienced operators remain on the sidelines to seize any buying opportunities on oversold excesses, while those who are leveraged suffer rapid liquidations.
Furthermore, technical signals such as bullish divergences on the RSI draw attention: historically, these patterns, especially on lower time frames, can pave the way for powerful coalitions of buyers and sudden short squeezes.
What are the consequences for Bitcoin and what to expect now?
The crash of the Bitcoin strength index, fueled by the sell-off of Galaxy Digital, presents new challenges and opportunities. On one hand, the selling pressure from old wallets reminds the community of the market’s vulnerability; on the other hand, technical signals such as the strong overselling open up space for possible rebounds or even medium-term reversals.
The future depends primarily on the reaction of buyers in key support areas. If demand absorbs the enormous supply, Bitcoin could consolidate and restart. However, if the wall of 114,500 dollars also gives way, new bear risks could emerge.
Traders and investors are called to observe the evolutions with extreme attention: everything can change in the next few hours, between panic selling and unique entry opportunities. Follow the discussion on the main social channels and stay updated on new onchain movements and signals of strength: volatility is just beginning.
