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Key Bitcoin Risk Indicator Signals Extreme Volatility Ahead: Details
The market has been experiencing extreme volatility in recent weeks, with the price of Bitcoin (BTC) plummeting by almost 18% in February alone. In response to this turmoil, a key risk indicator is signaling that we may be on the cusp of even more extreme fluctuations in the coming days.
According to technical analysis, the daily relative strength index (RSI), which measures price momentum, has dropped below 30, indicating that Bitcoin may be oversold and potentially due for a relief bounce. However, this phenomenon could simply be a temporary correction before the market continues its downward trajectory.
This volatility is not limited to just spot Bitcoin prices, as bearish sentiment has also engulfed U.S. Bitcoin exchange-traded funds (ETFs), with investors pulling an unprecedented $3.3 billion in February alone. This trend is poised for the biggest monthly exodus since ETFs debuted.
Despite this gloomy outlook, there are some positive developments that could influence the price of Bitcoin in the near future. For one, a break above or below the daily SMA 50 and 200 at $97,697 and $82,115 respectively would indicate a clear direction for the market trend.
Meanwhile, Bitcoin has temporarily dipped below its 200-day moving average, currently at $82,117, since October. This could have far-reaching implications for both short-term and long-term trends in the cryptocurrency market.
In conclusion, while this risk indicator signals extreme volatility ahead, it remains to be seen whether we will see a relief bounce or further declines.
Source: https://u.today/key-bitcoin-risk-indicator-signals-extreme-volatility-ahead-details
