The cryptocurrency market experienced another painful correction, which saw bitcoin (BTC) briefly plunge below $100,000 for the first time since June. Over the past several hours, the bulls have managed to reclaim some lost ground, while three key factors signal that a more significant resurgence could be on the way.
Time for a Rally Again?
The leading digital asset has been on an evident downtrend lately, with its valuation tumbling by nearly 10% in the past week. The market’s bearish tone hit a peak on November 4, when BTC temporarily plunged to around $99,000.
Somewhat expected, the negative performance of bitcoin caused panic across the crypto space, and the popular Fear and Greed Index, which follows the investors’ sentiment, entered “Extreme Fear” territory.
While this may sound like more bad news, it can also be interpreted as a bullish element. “Extreme Fear” levels sometimes signal that the bottom is already reached, indicating a possible buying opportunity, whereas the crypto market is rather unique and often moves against people’s expectations.
X user ALLINCYPTO highlighted some previous occasions in the past few years when the Fear and Greed Index dropped to similar lows, and each time BTC’s price rebounded shortly after.
The next factor worth paying attention to is the amount of bitcoin stored on crypto exchanges. CryptoQuant’s data shows that the figure continues to hover around the seven-year low of approximately 2.38 million BTC reached on November 3, reflecting reduced selling pressure rather than a shift towards centralized platforms with the potential goal of widespread profit-taking.
Last but not least, we will touch upon BTC’s Relative Strength Index (RSI), which measures the speed and magnitude of recent price changes and helps traders identify reversal points. The technical analysis tool ranges from 0 to 100, and readings around or under 30 suggest the asset could be oversold and poised for a rally. As of this moment, the RSI stands at approximately 32.
The Next Targets?
Currently, BTC trades at just under $103,000, and numerous industry participants believe the rebound has just begun. According to Coin Bureau, the asset’s price has touched its 50-week moving average, a level that has historically preceded a new all-time high.
Some market observers think the prolonged shutdown of the US government could be among the reasons negatively impacting BTC and the entire cryptocurrency sector. That said, they claimed that the eventual restart could act as a major catalyst. X user Gordon recalled that a similar government shutdown occurred in early 2019, and once operations resumed, BTC’s valuation exploded.