The Bitcoin market faced intense pressure this week, as mass selling by Galaxy Digital drove a sharp decline in price and sentiment. In the past 24 hours alone, over $500 million in BTC liquidations rocked the market, pushing Bitcoin’s Relative Strength Index (RSI) to ultra-rare oversold levels.
BTC RSI Crashes to 6/100 Before Bullish Divergence Emerges
On Friday, Bitcoin’s RSI dropped to just 6 out of 100 on the 15-minute chart — one of the most extreme oversold conditions ever recorded. This occurred as BTC/USD dipped below $114,600, its lowest level since early July.
“I’ve never seen BTC this oversold,” noted a trader. RSI readings below 30 generally indicate oversold conditions, but a reading near 6 is historically rare.
Despite the plunge, bullish RSI divergence is beginning to form, with the indicator printing higher lows even as price continues to create lower lows — often a signal of an upcoming reversal.
Galaxy Digital Offloads Thousands of BTC
The sell-off is linked to Galaxy Digital, which moved thousands of coins from wallets dormant for over 14 years. These legacy BTC holdings were sent to exchanges, leading to fears of massive liquidation. In total, around 80,000 BTC have been shifted on-chain recently, creating immense pressure on spot markets.
The BTC price has stalled ever since these old wallets started moving,” a trader observed.
Traders Watching for Rebound Toward $117,000
Despite the turbulence, traders see a potential bounce forming, especially if panic-driven volume remains absent. Market analyst Skew emphasized that true capitulation — marked by high volatility and extreme volume — hasn’t yet taken place.
“The market feels cautionary, not panicked. It’s a time to watch closely,” Skew commented.
He also pointed to $117,000 as a key resistance level that could act as a short-term recovery target if buyers step in to absorb the selling pressure.
Extreme RSI Levels May Spark Short-Term Bounce
As Bitcoin hovers around $115,700, technical indicators suggest a potential bottom formation. With RSI rebounding from record lows and historical wallet activity likely peaking, traders are bracing for a volatile yet opportunistic weekend.
Bitcoin’s RSI hasn’t been this weak in years — but that may be just what bulls need for a reversal.
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
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