Bitcoin has seen some intense turbulence throughout the past day, with the cryptocurrency losing the support it had at $9,400 before plummeting into the $8,000 region
Buyers were able to guard against the massive influx of selling pressure, supporting it above $9,000 for most of the day
The defense of the upper-$8,000 region has caused the crypto to form a double bottom seen while looking towards its RSI
This indicates that the crypto could be forming a bottom pattern similar to that seen in late-May
Negative funding rates may also suggest bears are getting overzealous
Bitcoin and the cryptocurrency market bore witness to a sharp decline that caused many digital assets to shatter beneath the lower boundaries of the consolidation ranges they were previously caught within.
This movement led Bitcoin down to lows of $8,900, but an abundance of buying pressure here helped thwart a deeper decline.
In tandem with this dip, the cryptocurrency’s funding rates across most major trading platforms flipped negative. This means that traders are paying a premium to be in short positions.
All hope is certainly not lost for buyers, however, as the benchmark digital asset has posted a double bottom on its RSI indicator.
This same pattern was formed when BTC bottomed out in late-May before rallying from the $8,000 region to highs of $10,500.
Bitcoin Dips into Key Support Region as Buyers Attempt to Thwart a Further Decline
At the time of writing, Bitcoin is trading down just under 3% at its current price of $9,200. The cryptocurrency has been trading within a consolidation channel between $9,000 and $10,000 for the past couple of months.
Overnight, BTC did decline to lows of $8,900, but the buying pressure here proved to be insurmountable for sellers.
Although the crypto is currently trading above a well-established and strong support region, traders still seem to think that it is positioned to see further downside.
This trend is clearly seen while looking towards Bitcoin’s funding rates, which have flipped negative across the board.
Mohit Sorout – a founding partner at Bitazu Capital and a respected trader – pointed to this trend in a recent tweet, noting that it is particularly clear while looking at Binance and BitMEX.
“Sellers are paying on binance & bitmex to short support,” he noted.
Image Courtesy of Mohit Sorout. Chart via TradingView
BTC Could Be Flashing Signs of Forming a Mid-Term Bottom
One trend that investors should be aware of is the emergence of a double bottom on Bitcoin’s RSI indicator.
Although not explicitly bullish, this same pattern did form when the cryptocurrency was trading within the mid-$8,000 region in late-May – just before it rallied up to highs of $10,400.
Another analyst spoke about the formation of this pattern, offering a chart showing Bitcoin’s 4-hour chart.
“Bitcoin 4 hour – RSI double bottom.”
Image Courtesy of Big Cheds. Chart via TradingView
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Charts from TradingView.