The crypto space is getting more and more volatile as institutional players rebalance their portfolios and Bitcoin experiences strong price action. Recent ETF flows and large-scale market action demonstrated by technical indicators like the Relative Strength Index (RSI) can affect the near-term trend of Bitcoin.
The last time this happened was in August 2024, but according to Ali Charts, Bitcoin has now hit oversold circumstances. According to historical data, Bitcoin had a 33% increase during the prior instance. An important momentum indicator, the RSI-14, indicates that Bitcoin is getting close to important support levels.
Key RSI levels at 30, 35, and 70 are shown in Glassnode's TRX to Bitcoin RSI chart, which monitors the price of Bitcoin from September 2024 to February 2025.
Source: Ali Charts
Between September and mid-November 2024, the price of bitcoin increased steadily before leveling off. But February 2025 saw a steep drop in price, which led to a major reduction in RSI values. Analysts note that historical patterns suggest potential price rebounds when RSI touches support levels.
The RSI-14 previously tested support in September 2024 before rebounding, and the current market structure indicates a similar setup. Market observers are assessing whether this could indicate another recovery or further downside risk for Bitcoin.
Crypto Rover has emphasized Bitcoin's interaction with its 200-day simple moving average (SMA) as a crucial technical factor. In recent months, the cryptocurrency has made several tests of this support level.
Three key touchpoints are identified in a BITSTAMP chart that shows the fluctuations of Bitcoin from May 2024 to February 2025: July 2024, August 2024, and February 2025. After testing the 200-day SMA in July and August, Bitcoin recovered, resulting in long-term price increases.
Source: Crypto Rover
In February 2025, Bitcoin is once again approaching this key support level. The 200-day SMA, currently positioned at $81,875, has historically acted as a strong price floor.
The RSI-14 indicator now registers at 27.04, confirming oversold conditions. Market data suggests that Bitcoin has historically rebounded when the RSI enters such levels alongside the 200-day SMA. However, failure to hold this support could lead to further downward movement.
According to Ted Pillows, significant Bitcoin outflows have been recorded from BlackRock’s iShares Bitcoin Trust (IBIT). Data tracking Bitcoin transfers from IBIT to Coinbase Prime Deposit between January 28, 2025, and February 25, 2025, shows a notable decline in Bitcoin holdings. BlackRock's BTC holdings had increased steadily in late January before peaking in mid-February, followed by substantial outflows.
Transaction records confirm multiple Bitcoin transfers, each involving 300 BTC, valued at approximately $25.99 million per transaction. These successive movements suggest structured institutional sell-offs rather than isolated withdrawals. The rapid Bitcoin outflows from IBIT's ETF addresses to Coinbase Prime Deposit align with the broader market decline in February 2025.
Data on bitcoin holdings shows a period of continuous buildup until the middle of February, after which there was an accelerated decline. This change suggests that institutional investors might be modifying their Bitcoin holdings, which would affect the mood of the market as a whole. Experts are keeping an eye on whether further withdrawals would drive down the price of Bitcoin shortly.
Whether Bitcoin will sustain support at the 200-day SMA and RSI levels is a key concern for market experts. Though ETF withdrawals and investor mood present extra dangers, Bitcoin has historically recovered from such circumstances.
The price of Bitcoin may recover similarly to previous cycles if it remains above the 200-day SMA. Bitcoin might, however, fall further if more selling pressure pushes it below this important support level. Institutional measures, such as BlackRock's Bitcoin withdrawals, still have a big influence on the short-term price changes.
Bitcoin is at a critical juncture based on RSI movements. Bitcoin may pick up steam if the RSI-14 steadies and rises. On the other hand, the market may see prolonged bearish conditions if RSI values stay low.
To evaluate Bitcoin's possible course in the changing market environment, analysts and investors are keeping a careful eye on these technical indicators as well as institutional activity.
On-Chain Media articles are for educational purposes only. We strive to provide accurate and timely information. This information should not be construed as financial advice or an endorsement of any particular cryptocurrency, project, or service. The cryptocurrency market is highly volatile and unpredictable.Before making any investment decisions, you are strongly encouraged to conduct your own independent research and due diligence
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