BTC was down by about 3% over the past week and has outperformed most alternative cryptos, which suggests a lower appetite for risk among traders. Typically, in down markets, BTC declines less than alts because of its lower risk profile.
The relative strength index (RSI) on the weekly chart is the most oversold since March 2020, which preceded a strong crypto rally. This time however, the deterioration in long-term momentum suggests limited upside in BTC.
There is growing risk of additional breakdowns in price because of negative momentum readings based on weekly and monthly price data. If a volatile down move occurs, initial support is seen at $25,000, which is around the May 9 price low. There is additional support at the 200-week moving average, currently at $22,061, which could stabilize price action.
A more conclusive downside target would be $17,673, which is roughly 78% of the prior uptrend from May 2020 to November 2021. That price level would also result in a roughly 73% peak-to-trough decline, which could signal capitulation. Bitcoin declined by 83% from its all-time high around $19,890 during the 2018 crypto bear market.
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