Bitcoin fell further on February 3 as analysis showed that old resistance levels have returned to the bulls.
After tech stocks shocked the world in Wednesday’s trading, major cryptocurrencies have struggled to stabilize.
BTC/USD is down for a second straight session, trading 5.25% lower at press time. The sell-off saw the price hit an intraday low of $36,375, following a high of $38,437. This move has seen Bitcoin price move closer to the $35,000 support level.
Adding to this, the 14-day RSI is once again turning lower, this time dropping below the 35 midpoint, weaving deeper into the oversold zone.
The RSI is currently at 34 but if this week’s momentum continues to decline, the indicator could hit as low as 29.
Source: TradingView
$38,600 is still strong resistance
Trader Rekt Capital reveals the area at $38,600 – a resistance at some point in 2021 – is once again acting as a tough hurdle that the bulls need to overcome.
“Indeed, BTC produced an upside wick into resistance on its latest recovery. For the time being, this ~$38600 area continues to figure as resistance.”
Source: Rekt Capital/Twitter
However, according to trader Anbessa, “the lower, the better” for Bitcoin:
#BTC Update
– dead cat inside LTF rising wedge, breakout & continuation?
– current support levels mid range, M-neckline & downtrending channel (since Nov21)The lower we go the better r:r ratio for a new #midterm LONG entry. Eg nuke scenario (right) crowded greedy entry pic.twitter.com/nCJVcHiQjc
— AN₿ESSA (@Anbessa100) February 3, 2022
Moving on to on-chain indicators, Bitcoin’s Puell Multiple has flashed a major “oversold” signal following the RSI. This indicator, created by David Puell, uses miner revenue against spot prices to determine when prices are too high or too low.
The Puell Multiple is currently trending down and has been at its lowest level since June 2021, the midpoint of the pullback following China’s mining ban.
Source: BuyBitcoinWorldwide
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