Bitcoin Faces RSI Showdown as Price Drops to New Two-Week Low

6:14 pm
September 1, 2023
Featured image for “Bitcoin Faces RSI Showdown as Price Drops to New Two-Week Low”

Summary: Bitcoin (BTC) experienced a further decline after the Wall Street opening on September 1st, extending the losses from the monthly close. The weakening performance resulted in the lowest price since August 22nd. The downward volatility in Bitcoin and other cryptocurrency markets continued due to the August monthly close. There is little optimism regarding a rebound in September. A famous trader and analyst, Rekt Capital, explained that BTC price failed to hold on to gains caused by the “Grayscale hype,” with strong selling pressure and dropping weekly relative strength index (RSI) values towards a key rising trendline. Targets for further declines are expected to be at various levels on the way to $23,000, which has become a favorite among traders. A potential relief rally could top out at $27,200.

Source: Cointelegraph

BTC/USD 1-day chart
BTC/USD 1-day chart. Source: TradingView

BTC price “Grayscale hype” fades away

Data from Cointelegraph Markets Pro and TradingView confirms the weakening performance of BTC price, which reached the lowest level since August 22nd. The August monthly close caused downward volatility in Bitcoin and cryptocurrency markets. The BTC/USD pair experienced an 11.2% loss in August, and experts see little hope for a bounce back in September. Rekt Capital, a prominent trader and analyst, mentioned in a YouTube update that Bitcoin failed to hold on to the gains from the “Grayscale hype.” He also noted that the weekly relative strength index (RSI) values were dropping towards a critical rising trendline, indicating the potential for further downside. Additionally, a cluster of exponential moving averages (EMAs) that previously acted as support have now flipped to resistance. Targets for a future drop in BTC price are expected to be at various levels on its way to $23,000, which has become a favorite level among traders. Based on historical data, losses between 7% and 13% are considered reasonable for September.

BTC/USD annotated chart with RSI data
BTC/USD annotated chart with RSI data. Source: Rekt Capital/YouTube

U.S. dollar strength challenges Bitcoin’s performance

Bitcoin’s performance was hindered by continued strength in the U.S. dollar for the second consecutive day. The U.S. Dollar Index (DXY) was above 104 and is expected to continue its uptrend that started in mid-July. The resistance level of interest is a previous local high in June, which acted as resistance again in August. Market participants have conflicting opinions on the role of the DXY’s strength in suppressing BTC price, as the inverse correlation between them has been challenged over the past year but is still relevant.

U.S. dollar index (DXY) 1-day chart
U.S. dollar index (DXY) 1-day chart. Source: TradingView

FAQs

What caused Bitcoin’s price to drop?

Bitcoin’s price dropped due to the weakening performance after the Wall Street opening and the August monthly close, which resulted in downward volatility in Bitcoin and cryptocurrency markets.

What is the role of the U.S. dollar in Bitcoin’s performance?

There is a conflicting correlation between the strength of the U.S. dollar and Bitcoin’s price. While some believe that a strong dollar suppresses BTC price, others challenge this correlation. However, the recent strength in the U.S. dollar has negatively impacted Bitcoin’s performance.

Is there hope for a rebound in Bitcoin’s price?

Market observers have expressed little optimism regarding a rebound in Bitcoin’s price in September. The drop in BTC price and the weakening performance suggest a continuation of the downward trend.


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