TLDR
- From a towering $109,000 high achieved in January, Bitcoin has now sagged below $80,000, showcasing a sharp 27% decrease.
- The Bitcoin Rainbow Chart suggests BTC still has affordability on its side and hasn't reached speculative bubble heights yet.
- When looking at RSI and Bitcoin dominance trends, there isn't a match with historical cycle peaks, hinting that we're not atop a market pinnacle.
- An observed gap on the CME between $82,110 and $86,000 signals that a minor price recovery could be on the horizon.
- Attention has been drawn to the $83,000 mark, previously a strong support level, which has now been breached.
Bitcoin is on a downturn lately, losing steam following its peak at $109,000 in January 2025, with a notable 14.6% decline just this past week.
Currently trading at $79,766, Bitcoin's present valuation signifies about a 27% fall from the milestone set earlier this year.
The Bitcoin Rainbow Chart, Utilizing a logarithmic growth curve for long-term Bitcoin analysis, the indicator now suggests a bargain opportunity, having climbed past HODL suggestions since December to now encourage buying.
Historically, in past cycles, this chart would escalate to the 'Seriously sell!' level before any big corrections. Interestingly, we haven't even nudged the 'Is this a bubble?' marker yet, signaling we're not near a peak.
Mirroring observations from the 2017 boom, the weekly RSI during that time exceeded 70 for several weeks with Bitcoin reaching new heights.
In 2021, a bearish diversion between price and RSI led to a nearly 50% drop for Bitcoin. Recently, although RSI hit above 70 for a six-week stretch, it quickly dipped beneath the neutral level of 50.
The prevailing pattern resembles more of a mid-cycle adjustment akin to summer 2021 rather than an all-out market peak, implying Bitcoin might sink down closer to the $54,000 level.
Glimpsing at Bitcoin dominance charts reveals another aspect; past cycle peaks saw dominance at multiple-month lows.
At this juncture, Bitcoin dominance is on an upward trajectory, hitting new highs unseen since March 2021, which doesn't align with typical high-point behaviors.
CME Gap
Market analyst Ibrahim closely follows the CME gap narrative's impact on Bitcoin's trading activity. The CME gap concept refers to the disparity in Bitcoin pricing at the week's close compared to its opening after the weekend.
A notable gap emerged when Bitcoin's price opened at $82,110 on the CME, extending up to the $86,000 range, a gap pattern historically known to often close as the price moves back to paused trading territories.
Highlighting a past example, Ibrahim points out Bitcoin filled a $10,000 gap in just 19 hours on February 28. With the current state, Bitcoin might aim for the $86,000-$90,000 range imminently.
Nonetheless, bridging this gap won't necessarily redefine the trend completely, leaving the broader market's direction ambiguous through March into early April.
An expert analyst marked the $83,000 level as crucial because it is rooted in the Realized Price of 3-6 Month UTXOs, a measure tracking the mid-term holders' buying prices.
Bitcoin tested the $83,000 floor but fell beneath it, potentially stirring fear and elevating selling pressure among mid-term investors.
Should aggression in selling rise, Bitcoin might enter a distribution phase, prompting short to mid-term investors to push stock sales, turning sights to the next support at $78,000-$80,000.
Despite recent price declines, loyal long-term investors might find reassurance in current market indicators that fail to mirror previous cycle peaks. It points to the possibility of the market cycle still having momentum left.
