“Oversold” Bitcoin Bounces From 200DMA & Realized Price – Where Next for BTC as Bank Crisis/Fed Tightening Jitters Rock Sentiment?

cryptonews.com:

After falling another 1% on Friday to take its week-to-date losses above 10%, Bitcoin (BTC) is now oversold, according to the widely followed 14-Day Relative Strength Index (RSI) indicator. BTC/USD was last changing hands in the $20,100s, having dipped as low as the $19,500s earlier in the session, with its RSI last just above 28.

An RSI score of less than 30 is widely viewed as indicating that market conditions have become oversold in the short term. Meanwhile, an RSI score of above 70 is viewed as indicating market conditions have become over-bought.

The last time Bitcoin’s RSI fell below 30 was in the immediate aftermath of the collapse of cryptocurrency exchange FTX back in November. Bitcoin’s RSI entering oversold territory is often a lead indicator that a recent sharp drop may be about to end and a period of consolidation at lower price levels may be incoming.

Bitcoin’s RSI falling into oversold territory comes after a so-called “bearish divergence” earlier in the year. This is where the RSI starts posting lower highs, despite prices remaining in an uptrend.

In the most recent example, Bitcoin’s RSI hit a high of 86 on the 13th of January when BTC/USD was just breaking above $20,000, before continually posting lower highs as the Bitcoin price advanced above $25,000 over the course of the next few weeks.

Some traders view a bearish divergence of the RSI with the underlying price as an indicator that bullish price momentum is waning. And that certainly seems to have been the case in the last few weeks.

Bitcoin’s bounce back above the $20,000 level on Friday suggests appetite in the market to defend the key 200-Day Moving Average and Realized Price levels in the $19,700-800 region remains strong.

For reference, the Realized