BTC Price Struggles Amid Sideways Performance
Bitcoin (BTC) continued to defy market trends on August 22nd as the price hovered around $26,000 throughout the day. This sideways movement marked the third consecutive day of lackluster performance for BTC/USD.
Despite being in heavily oversold territory, according to the relative strength index (RSI), Bitcoin showed no signs of a recovery bounce from levels not seen in two months. Traders were becoming restless, with popular trader Jelle referring to the intraday movements as the "death chop". Monitoring resource Material Indicators described the current situation as a "game of chicken" to see who would make a move to break the chop.
Potential for a Sharp Move in Either Direction
Analysts looking at the Binance BTC/USD order book have noted a lack of liquidity, which increases the possibility of a sharp move in either direction. Material Indicators explained that market participants are waiting to see if more bid or ask liquidity will enter the range, ultimately determining the next major move for Bitcoin.
The implication of a lower low (LL) would be significant for bulls, potentially jeopardizing the $20,000 support level going forward. Printing two lower lows would push BTC down to sub $20,000 levels, making it a critical moment for the cryptocurrency.
RSI Signals a Strong "V-Shape Recovery" Opportunity
Despite the current price struggle, there is hope that Bitcoin can bounce back and continue its overall uptrend. Analyst Michaël van de Poppe, the founder and CEO of trading firm Eight, highlighted the heavily oversold signals generated by the RSI. The RSI is measuring less than 19 on 12-hour timeframes, which is near its lowest levels since the 2018 bear market bottom. Daily levels are also reaching their lowest point since the March 2020 COVID-19 cross-market crash.
Van de Poppe believes that Bitcoin could experience a V-shaped recovery, similar to previous flash crashes, and could potentially reach $26,500 or higher in the near future. Another trader, Jelle, compared the current price action to September 2020, just before the start of the previous bull market, suggesting that Bitcoin could gradually grind higher in the coming weeks.
Disclaimer
This article does not provide investment advice or recommendations. Trading and investing in cryptocurrencies carries risks, and readers should conduct their own research before making any decisions.
