Analyst says we are selling the top amid the current Bitcoin bearish RSI divergence, signaling a potential correction.
Bitcoin’s price has recently reached $105,303, showing a modest 0.02% increase in the past 24 hours. However, it has experienced a 4.13% decline over the past week. As Bitcoin’s price continues to struggle within this stagnation, analyst Captain Faibik highlights a possible topping out, signaling that the current price movement could be nearing its end.
Earlier on, around late 2024 and early 2025, the price of Bitcoin continued to rise, while the Relative Strength Index (RSI) signaled a weakening of buying momentum.
RSI Shows Weakening Momentum
The RSI, sitting at 61.88 at the time of the analyst’s snapshot, peaked around 80 before trending downward. This shift in the RSI indicates that the momentum behind Bitcoin’s price movement is starting to fade. Historically, such a change often precedes a correction.
Price Action Confirms Potential Top
Another key factor supporting the possibility of a Bitcoin price correction is the ascending trendline drawn from the high hit in December 2024. Bitcoin has struggled to break past the resistance levels at $109,000 and $111,000 formed around May 19, with the trendline capping its upward movement.
According to Captain Faibik, these price points, along with the RSI divergence, suggest that Bitcoin may have reached its peak. As the market approaches these resistance zones, the likelihood of a pullback increases, with Faibik predicting a potential move toward the $92,000 to $94,000 range.
A Similar Pattern from 2022
This pattern is reminiscent of Bitcoin’s price action in 2022. Back then, Bitcoin formed a descending trendline after hitting a bottom around $16,000. As the price consolidated, the RSI remained in an upward trend, despite being in the oversold region. This shift in momentum eventually led to a strong recovery in Bitcoin’s price.
While this comparison highlights a similar dynamic, it is important to note that the current market conditions and indicators suggest a different outcome. As Captain Faibik points out, buying the dip in 2022 worked out well, but the current signals indicate a strategy of selling the top.
Derivatives Market Dynamics Add Context
Meanwhile, data from Bitcoin’s derivatives market offers further insight into the current trading environment. Trading volume for Bitcoin derivatives has seen a slight increase of 1.62%, now standing at $100.76 billion. This uptick indicates growing market activity and interest in Bitcoin futures and options.
However, open interest has decreased by 1.37%, totaling $69.70 billion. This drop suggests that traders are closing positions, possibly taking profits amid the recent price uncertainty. Additionally, the liquidations data reveals that a significant number of long positions have been affected. In the last 24 hours alone, $72.32 million in liquidations occurred, with the majority of losses impacting long positions.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
