Bitcoin Price Analysis: BTC Extends Retreat to Sub $63K, Threatening Retracement to $55K

On February 24, the price of Bitcoin (BTC) fell below $63,000, hitting an intraday low of $62,694. At press time, the overall relative strength index (RSI) was at 43.21, reading oversold, similar to the Mt Gox and COVID-19 crises. Chairman and CEO of JPMorgan Chase & Co., Jamie Dimon, noted parallels in the current market conditions and the 2008 crisis.

The fear-and-greed index has now clocked 11/100, depicting extreme fear, with 24h liquidations mounting to $342.76 million. Open interest (OI) sits at $43.64 billion, a significant decline from the $217 billion recorded just before the October 10 flash crash.

Possible Bitcoin pullback to $53-$55K

In the week ending February 20, CoinShares reported that digital asset products had entered their fifth week of consecutive outflows, amounting to $4 billion. On Monday alone, spot Bitcoin ETFs accounted for over $200 million worth of outflows, further contributing to the downward trend in crypto prices.

Source: CoinShares

Tensions between the US and Iran have driven recent global market volatility, with both sides considering launching the offensive following failed talks regarding Iran’s nuclear disarmament.

Samer Hasn, a senior market analyst at XS.com, says there is potential for a fall to $53-$55K, due to unwavering selling pressure. Matt Howells-Barby of Kraken echoed this view, adding, “The $60k level is a key support level that the bulls are watching closely.”

What the future holds

Software company Strategy now sits on $9 billion in unrealized losses from its BTC holdings. Despite previously affirming the crypto winter, Executive Chairman Michael Saylor sees this as a buying opportunity, saying, “Bitcoin is on sale.”

Supporting his theory is data from Glassnode, which shows accumulations of over 400,000 BTC at prices ranging between $60,000-70,000. This, in addition to increased mining difficulty, suggests a “buy the dip” trend upcoming as sales near exhaustion. 

At writing time, BTC was trading at $64,110 following an hourly recovery of 0.08%.