Bitcoin stubbornly remained trend-defying as it became a magnet for the $26,000 intraday BTC price movement on August 22. Analysts suggest that the RSI indicator supports the thesis of a “V-shaped recovery” and states that there is a high probability of Bitcoin making a comeback towards $26,500 or higher levels.
No Recovery Process Occurred
Data from TradingView revealed that BTC/USD followed its third day of sideways performance. Despite being oversold according to the Relative Strength Index (RSI) values, Bitcoin did not experience any recovery process from levels seen two months ago. Investors were uneasy, and popular investor Jelle referred to the intraday movements as a “death cross.”
Material Indicators, analyzing the liquidity in the BTC/USD order book, pointed out a significant liquidity shortage that enhances the potential for a sharp movement in both directions. The statement mentioned, “The market is waiting to see if more buying or selling liquidity will be drawn from the range.”
“So far, we are seeing small amounts of bid liquidity near $20,000, close to the active trading zone, but no significant liquidity has piled up to defend the price range.”
RSI Strengthens the “V-Shaped Recovery” Thesis
The hope that Bitcoin can recover its overall upward trend continues as the RSI increases. Michaël van de Poppe, the founder and CEO of trading firm Eight, highlighted the oversold signals generated by RSI in a YouTube update on August 22.
RSI was measured below 19 at the time of writing on the 12-hour timeframes, a level close to the lowest levels since the bottom of the 2018 bear market. Daily levels similarly reached their lowest levels since the March 2020 COVID-19 market crash.
Van de Poppe said, “Whenever we see such a move, there is a sort of V-shaped recovery happening, and it finds balance at higher ground.” He also added that it is “very likely” for Bitcoin to make a comeback towards $26,500 or more in the future.
