Bitcoin’s price continues to be characterized by turbulence following last week’s flash crash.
As of August 22, Bitcoin’s price remains stagnant around $26,000, showing little inclination for intraday movement. Despite being heavily oversold, as indicated by the relative strength index (RSI), Bitcoin has not displayed signs of a recovery bounce from its levels last seen two months ago.
Traders have dubbed the intraday movements as the “death chop,” reflecting the uncertainty and lack of clear direction in the market.
Market analysts are closely observing the liquidity on the Binance BTC/USD order book, noting a notable lack of substantial liquidity. This situation increases the possibility of a sharp price movement in either direction.
The situation is precarious for bulls, as a lower low (LL) could potentially jeopardize even the $20,000 support level.
RSI signals are indicating heavy overselling, with 12-hour timeframes showing RSI measurements lower than 19, reminiscent of the 2018 bear market bottom. Similar RSI levels were recorded during the March 2020 cross-market crash.
Based on historical patterns, analysts like Michaël van de Poppe, CEO of trading firm Eight, suggest the potential for a V-shaped recovery, leading to a stabilization at a higher floor. He notes that Bitcoin could possibly aim for $26,500 or higher in the near future.
Drawing parallels with past market behavior, some analysts anticipate a gradual grind higher in price, similar to the period before the start of the previous bull market in September 2020.