Bitcoin traded near $77,260 on Saturday following a volatile session that saw the asset reach an intraday high close to $79,500 before experiencing a sudden flash crash. Despite climbing more than 22% over the preceding week, technical signals have raised caution among market participants regarding short-term momentum.
RSI Reaches Seven-Year High
The relative strength index (RSI) measures price momentum on a scale of 0 to 100, with readings above 70 traditionally considered overbought. On the 4-hour chart, the indicator recently reached its highest level in more than seven years. Analyst Krown noted that while such extreme RSI readings can be favorable for the long term, readings above 80 to 90 typically reflect temporary demand exhaustion and historically precede short-term corrections or consolidations.
The market experienced an initial shock during the early hours of Saturday when Bitcoin retreated sharply from around $79,500 down to a low near $76,300. Market data indicates that the sudden price movement liquidated more than $500 million in long positions within minutes, contributing to total liquidations exceeding $1.35 billion over a 24-hour period.
Analyst Ted noted that Bitcoin is holding above its weekly bull market support band, adding that a weekly close above this zone is necessary to sustain further upside.
Analysts Split on Short-Term Scenarios
Views among market analysts remain divided on Bitcoin's immediate trajectory. Shardi B warned that the daily RSI sits near historic highs and urged caution, while others pointed out that the indicator stood at 84 near resistance zones that have previously challenged late buyers. CredibleCrypto suggested that a pullback or local top may be approaching if the initial expansion move is complete.
Conversely, some market observers argue that extreme RSI readings do not immediately terminate an ongoing move and that momentum could continue higher. Projected targets range from an extension toward the $83,000 to $88,000 zone if support between $75,000 and $76,000 holds, to a deeper correction toward $70,000 to $72,000 should momentum fade following the overbought extremes.
