We do not know if the Bitcoin crash is over yet despite the bullish news we have been getting lately, but we still have to keep an open mind that Bitcoin may even go down and find a new low during this "correction."
Looking at the charts, we can observe that the selling for Bitcoin reached a peak low of around $45,000, making a total of a 23% drop from the peak down to the $45,000 bottom.
The price is now recovering half of today's losses, but looking at the short-term bounces, the weekly RSI is still showing a bearish breakdown that could see us stuck at $58,000 and unable to go up and hit a new high for the next few weeks. The current RSI is the lowest on the weekly that it has been since October. It is now looking to exit the overbought territory that's been in since that time and moved back into the purple box, a neutral RSI area.
The goal is to stay above the middle line; despite how bad the dips were in the 2017 bull run, the RSI still managed to not go under 50. It managed to test the upper 50s in the lower 60s a few times, but it never exceeded 50.
The last times we had a significant bearish divergence like the one we are currently seeing now on the weekly RSI resulted in a correction for the Bitcoin market, which lasted for nearly six weeks with an average of a 38 percent price drop from the peak down to the bottom.
The current price action is standard for Bitcoin, just like when Bitcoin hit 42000 dollars. Bitcoin is currently in a downtrend until we break and close a daily candle of around 55,000 dollars. Until then, Bitcoin is in a downtrend which could last for a few days or a few weeks. We could still see Bitcoin fixing a new bottom in this price correction.
Despite all the bearish events currently happening for Bitcoin, Square has announced that they have purchased another 170 million dollar worth of Bitcoin. They now have five percent of their corporate cash holding in Bitcoin.
Square also sold Bitcoin to about a million new customers on their cash app about a month ago. This means that retail shows up for this bull market, and retail investors have the potential to pump this market.
There was also a large purchase of Bitcoin on Coinbase, meaning that people are buying the dip and getting ready for the next bull run.
