Early November Bitcoin Crash: Temporary Dip or Bearish Cycle?
This month, the price of Bitcoin has drastically decreased. It has dropped by over 15% since early November. One of the best assets of the year has become one of the worst during the current downturn as a result of this decline. The market is once again divided into two groups as a result of the decline. This, according to others, marks the beginning of a more significant correction. Others think this is just an exaggerated drop and the cycle is still ongoing. One level determines the following action. The rebound setup takes effect if Bitcoin reclaims it. The downside might quickly expand if it fails there.
Bitcoin RSI Shows Bullish Divergence Amid Oversold Conditions
On the other hand, early indicators suggest that selling may be waning. This week, the Relative Strength Index went into the oversold zone, but it has since turned around. That typically indicates a decrease in the pressure to sell. That notion is also supported by a longer-term tendency. The price of Bitcoin reached a higher low between April 30 and November 14. This indicates that the overall pattern is not entirely disrupted. But the RSI also reached a lower low during that time. This bullish divergence is concealed. It is a signal that frequently shows up when a strong trend is trying to pick up where it left off after a big reversal.
The price of Bitcoin must rise over $100,300, a crucial support level since late April, for the RSI indicator to materialize. This level may now function as a psychological barrier. Add data points to the same region of the chart. A sizable band of long-term Bitcoins has formed close to the $100,900 area, according to the UTXO Realized Price Distribution.
Because so much of the supply is at the same cost basis, a cluster like this frequently becomes an important decision point. This cost-basis cluster is located close to the RSI chart’s resistance level. Because of this, the momentum story is only significant if the price of Bitcoin closes above that area. The divergence and oversold readings remain unsubstantiated in the absence of that close.
Historical NUPL Lows Suggest Possible Bitcoin Bounce
The Net Unrealized Profit/Loss indicator provides the second justification for a rebound. NUPL is currently at its lowest level in a year at 0.40. This indicates that, similar to early-cycle times, the market is once again retaining extremely thin unrealized profits. The NUPL last had a similar low in April. Following that, in less than two months, Bitcoin’s value increased by almost 46%. This suggests that the market is about to enter a familiar pressure zone, but it does not ensure a repeat. Rebounds frequently occur in these areas if the price can level out. However, once more, this indicator is dependent on the price returning to the same resistance band.
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