Bitcoin News Today: Bitcoin RSI Dips Below 58.7, Bearish Signals Intensify

Bitcoin's monthly Relative Strength Index (RSI) has fallen below a critical threshold, sparking renewed concerns about a potential bearish trend. The RSI, a key momentum indicator, has slipped to 56.5, dropping below the four-year average of 58.7 for the first time since 2022. This development is being closely watched by traders and analysts, as historical data suggests that such a move often precedes a deeper market downturn.

The drop follows a 20% decline in Bitcoin's price over the last three months, with annual returns turning negative. Investors are now monitoring whether this is a typical correction or the start of a more prolonged bear market. Analysts note that the RSI's position near this key level places Bitcoin in a "decision zone," where the next few weeks could determine its near-term direction.

A sustained drop below 55 in the monthly RSI could signal a deeper bear market, while a rebound within the 55-58 range might indicate a potential recovery. Investors are advised to watch closely for signs of either scenario in the coming weeks.

Why the RSI Drop Matters

The RSI is a key indicator for assessing market momentum and has historically acted as a bull-bear dividing line for Bitcoin. When the RSI drops below the four-year average of 58.7, it has often signaled the transition from typical corrections to more severe bearish trends. This was evident during past downturns in 2018 and 2022, where similar RSI levels preceded extended price declines.

CryptoQuant analyst Axel Adler Jr. emphasizes the importance of the next one to two months, noting that the RSI's movement will be crucial in determining Bitcoin's short-term trajectory. If it holds between 55 and 58, a recovery may be possible. However, a sustained drop below 55 could indicate a more significant downtrend, raising the risk of a prolonged bear market.

How Markets Are Responding

Bitcoin's recent struggles have led to a shift in investor sentiment. Traditional safe-haven assets like gold and silver have gained traction, with silver rising approximately 148% this year and gold nearing a 70% gain. This shift indicates a growing preference for hard assets amid Bitcoin's volatility.

On-chain data also shows weak support below the $80,000 level, while ETF outflows have reached $175 million, signaling waning institutional confidence. These outflows suggest that large players are reducing exposure, which could further pressure Bitcoin's price stability in the weeks ahead.

What Analysts Are Watching

Technical indicators, including the monthly RSI and moving averages, will be key in determining Bitcoin's next move. The 50-day moving average (DMA) has recently climbed to its highest level above the 200-day DMA in years, a pattern that has historically been associated with both continued bullish momentum and eventual corrections.

Ari Wald, head of technical analysis at Oppenheimer, argues that while bearish divergence is present, it is not a definitive sign of a reversal unless it is accompanied by additional evidence such as weakening relative strength or a failure at key resistance levels. Currently, Wald believes the semiconductor sector, for example, is undergoing a "time correction" rather than a true reversal.

Risks to the Outlook

A prolonged decline in the RSI could trigger a more severe bear market, particularly if institutional selling continues and on-chain data shows increasing pressure. The next key level to watch is 55-should the RSI slip below that, Bitcoin may face extended downward pressure. Historical patterns suggest that such a move often leads to extended bearish phases.

Additionally, ETF outflows and weakening institutional demand are compounding the downside risk. If these trends continue, they could lead to further price weakness and a loss of momentum that is difficult to reverse in the short term.

What This Means for Investors

Investors are advised to closely monitor the RSI and related technical indicators in the coming weeks. A rebound within the 55-58 range could signal a potential recovery, while a sustained drop below 55 may indicate a deeper bearish phase.

Given the current market dynamics, investors should also consider diversifying into hard assets like gold and silver, which have shown strong performance amid Bitcoin's struggles. The decision zone is now in play, and the coming weeks will be critical in determining whether Bitcoin enters a new bear market or stabilizes for a potential rally.