Analyst: BTC price will have a V-shaped rebound RSI has hit a 5-year low

Author: WILLIAM SUBERG, COINTELEGRAPH; Compiler: Songxue, Jinse Finance

On August 22, BTC stubbornly bucked the trend, and $26,000 became a magnet for BTC's intraday price action.

BTC/USD 1-hour chart. Source: TradingView

BTC price "death cut" returns

Data from Cointelegraph Markets Pro and TradingView tracked the third straight day of sideways performance for BTC/USD.

Despite being heavily oversold, Bitcoin is refusing to stage any sort of recovery rally from levels seen two months ago, according to relative strength index (RSI) readings.

Market participants were restless, with prominent trader Jeller calling the intraday move a "death chop."

"At this stage, it feels like a 'chicken's game' to see who will make the move to break the stick," said Material Indicators.

Material Indicators analyzed the liquidity of the Binance BTC/USD order book and found that ** liquidity is generally lacking, increasing the likelihood of large moves in either direction. **

"The market is waiting to see if it attracts more liquidity bids or more inquiries".

"So far, we've seen a small amount of liquidity bid up from near the active trading area of $20k, but no liquidity (new or transferred) of any size has been piled up to defend prices from lower lows Influence."

**Nevertheless, this could be very serious for the bulls as a lower low (LL) could even threaten the $20,000 support level ahead. **

BTC/USD order book data for Binance Annotated Chart. Source: Material Indicators/X

RSI reinforces the "V-shaped recovery" theory

Looking ahead, Bitcoin remains poised to salvage its overall uptrend.

In a dedicated YouTube update on August 22, Michaël van de Poppe, founder and CEO of trading firm Eight, pointed to the severe oversold signal generated by the RSI.

At the time of writing, the RSI is below 19 on a 12-hour range, close to its lowest level since the 2018 bear market bottom. Daily levels were similar, hitting the lowest level since the March 2020 crash.

Van de Poppe said of the previous BTC price flash crash: “Every time we see a move like this, there is some kind of V-shaped recovery and it finds its balance at a higher level.”

He added that **Bitcoin is "likely" to make a comeback, with $26,500 or higher next in focus. **

BTC/USD 12-hour chart with RSI. Source: TradingView

“Current price action for #Bitcoin reminds me of September 2020 — just before the last bull market started,” Jelle said.

"Over a period of time, absorbing and slowly moving higher -- I could see similar results."

BTC/USD comparison chart. Source: Jelle/X