Bitcoin Crash Off Its Critical RSI May Spell More Trouble for the Global Crypto Market

Due to the most recent economic turmoil, the global crypto market is currently experiencing a major decline, with market cap losses of up to 12%. While Bitcoin, the biggest cryptocurrency by market size, also saw a major loss today after dropping dramatically off its critical RSI.

The bank run at Terra Luna and subsequent collapse of LUNA Classic, however, sent shockwaves across the cryptocurrency market in May 2022, causing Bitcoin to experience its first 7-week losing streak.

However, now the “liquidity crunch” at FTX and other market contagions that are impacting the sector globally has been blamed for this sharp decrease. Due to this, BTC hit a fresh 23-month low.

On Wednesday, the price of BTC on the cryptocurrency market Bitstamp reached $16,936 following news that Binance was considering terminating the agreement after taking a quick look at FTX’s financial records.

According to CoinMarketCap’s data, BTC was trading at $16,797.71 as of the time of publication and dropped by 10% the previous day. The token has also seen a loss of about 16.35% in the last seven days.

The sharp decline in bitcoin’s value quickly rippled through traditional markets, causing the ProShares Bitcoin Strategy ETF (BITO) to temporarily halt trading on Wednesday as the underlying BTC futures on the Chicago Mercantile Exchange (CME) fell, which in turn set off a circuit breaker on the ETF’s stock exchange.

Trading resumed after the event, but it was a sudden reminder of the maliciousness present in crypto markets. Bitcoin had been trading at $20,000 for quite some time before this incident occurred.

Bitcoin (BTC) Price Analysis

In terms of technical analysis, Bitcoin has shattered a triple bottom support level of $18,244; a two-year low was reached for it. Closing candles below this level might send BTC as low as $16,332. On a daily basis, Bitcoin has also developed a “three black crows” pattern that suggests a possible continuation of the slump.

Nevertheless, closing candles above $16,300 may start a positive correction since leading technical indicators like the RSI and MACD have reached the oversold region. The near-term barrier level for Bitcoin on the upside is still $18,244.

Bearish engulfing’s closing signal tells us that the selling trend is probably going to continue. Therefore we should keep a watch on $18,170, and selling may increase if the price closes below this level.

In a similar vein, Ethereum, the second-largest currency, failed to reach a critical threshold and fell precipitously to $1,259.44 in the same period. The price of ETH is currently $1,214.31, down about 19% over the last 24 hours and 21.87% for the last seven days.

The majority of popular cryptocurrencies are also seeing huge losses on both the daily and weekly charts, with XRP dropping 15.63% of its value on a day, Dogecoin dropping over 17.03%, Polygon losing 21%, and Solana losing 35% in the most recent day and over 40% in the seven before that.