Analysts at the blockchain firm Matrixport have noted that Bitcoin has historically provided substantial buying opportunities when the Relative Strength Index (RSI) falls to around 40%.
Currently, the RSI is 48%, which is still too high to signal the typical market patterns for optimal entry points. Given the ongoing uncertainty, Matrixport advises investors to remain patient and wait for a more favourable opportunity.
Today’s???? – Feb 5: Bitcoin’s Momentum Weakens: RSI Divergence Signals Caution#Matrixport #MarketInsights #BTC #ETH #CryptoFinance #cryptoinvestment pic.twitter.com/WXuK4mfjQU
— Matrixport Official (@Matrixport_EN) February 5, 2025
On February 4, the price of Bitcoin experienced a spike after previously declining due to concerns about President Donald Trump’s proposed tariff hikes, which raised fears of a trade war. However, Bitcoin’s price recovered after Trump temporarily suspended the tariffs.
A significant liquidation of speculative bets drove this recovery. The crash on February 3 was the largest on record, surpassing the collapses of Terra and FTX. Over $2.3 billion in leveraged cryptocurrency positions were liquidated within 24 hours, with some alternative estimates suggesting that total liquidations could have reached between $8 billion and $10 billion.
$2.15b liquidated from the crypto market in the past 24 hours.
Worst liquidation event in history in a single day.
Worse than LUNA. Worse than FTX ($1.6b). pic.twitter.com/5yeQUtoHkR
— Miles Deutscher (@milesdeutscher) February 3, 2025
Given these volatile market conditions, Matrixport recommends a strategic approach emphasising patience and searching for an optimal entry point. While Bitcoin is maintaining its position above $100,000 and recently peaked at over $102,000 after a dip to $91,229 on February 3, analysts are cautioning against potential signs of a slowdown, according to CoinGecko. The Relative Strength Index (RSI) suggests that the market may enter a consolidation phase.
This cautionary stance aligns with previous reports that indicate a shift in Bitcoin’s market cycle. Matrixport analysts suggest a change in Bitcoin’s market cycle, indicating that past steep corrections may be over. They note that Wall Street’s growing involvement could extend the bull market beyond 2025, with institutions holding Bitcoin for extended periods due to increased regulatory transparency. Favourable macroeconomic conditions are expected to support ongoing capital inflows into Bitcoin, promoting sustained growth in the coming years, as highlighted in their January 31 post.
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