Bitcoin Weekly RSI Echoes Mid-2022 Bear Market as BTC Plays Liquidity

Bitcoin (CRYPTO: BTC) briefly surged toward the $70,000 level on a U.S. bank holiday before retreating, underscoring how thin liquidity can amplify price moves in markets with limited participants. The session featured swift reversals as major venues saw shallow order books, allowing large players to push the price in sharp, short-lived bursts and then pull back just as quickly. Traders described a day of both dramatic squeezes and measured pauses, with liquidity gaps creating a backdrop where price action could swing without a clear directional trend. While the move rekindled talk of potential bottoming signals, observers cautioned that a single holiday-driven spike is not a proof point for a durable trend, particularly given the broader context of a market accustomed to volatile cross-currents.

Key takeaways

• Holiday-thinned liquidity on a U.S. trading day amplified both upside and downside moves, with BTC briefly touching $70,000 before a pullback.
• Price action occurred in a tight range, described by analysts as a pattern of “breakouts and shakeouts” that failed to establish a decisive breakout.
• CoinGlass tracked roughly $120 million in crypto liquidations across four hours, highlighting the reflexive nature of order-book dynamics during low-volume sessions.
• Weekly RSI readings dipped to 27.8, the lowest since June 2022, fueling discussions about potential cycle lows and macro bottoming patterns.
• Market commentary emphasized ongoing liquidity-driven reversals, with notable divergence in activity on different exchanges and persistent bullish-bias signals outside of a handful of venues.
• A sequence of social posts from traders highlighted mixed sentiment, with some noting net buying pressure overall while exceptions persisted on certain platforms such as OKX.

Tickers mentioned: $BTC

Price impact: Neutral. The episode demonstrated how thin liquidity can drive rapid intraday reversals without signaling a sustained directional shift.

Trading idea (Not Financial Advice): Hold. Given the absence of a clear breakout and the sensitivity to depth on holiday sessions, traders may prefer to wait for a more decisive move backed by stronger liquidity and higher-volume participation.

Market context: The latest price activity reflects a broader pattern in crypto markets where liquidity constraints during holidays or low-volume sessions can magnify swings. It also sits amid ongoing debates about macro risk sentiment, ETF-related flows, and the persistence of risk-on versus risk-off dynamics that shape digital-asset price formation.

Why it matters

The episode matters because it exercises a fundamental risk for traders: price discovery in environments where liquidity is not consistently deep. Thin order books can magnify both hopeful breakouts and fear-driven reversals, making risk management and position sizing more critical than in normal trading conditions. For market participants, the contrast between a swift move to the multi-year high vicinity and a rapid retracement underscores how much of Bitcoin’s price action still depends on the availability of buyers and sellers at key price levels rather than on a sustained flow of capital. The event also provides a practical test bed for risk controls, as exchanges and liquidity providers calibrate their resilience to sudden, liquidity-driven shocks.

From a technical perspective, weekly RSI readings toward oversold territory suggest potential patience is warranted before drawing conclusions about a longer-term bottom. Yet the narrative is not binary: the same chart readings were cited in past cycles as precursors to stalled consolidations or gradual basing patterns rather than immediate recoveries. Analysts emphasized that while the current RSI dip resembles patterns seen in previous bear markets, it does not guarantee a repeat of those outcomes. The broader takeaway is a need to monitor how price, momentum, and volume evolve together in the weeks ahead, particularly as markets digest macro inputs and any incremental developments in crypto regulation or product approvals that could influence risk appetite.

On-chain and on-exchange observations further enrich the story. Market participants noted blocks of liquidity getting reconfigured as bids and offers were removed and re-placed at new levels, reinforcing the sense that order-book dynamics played a leading role in the day’s action. The interplay between short-term liquidations, bid-ask wall reformation, and whale activity suggested a tug-of-war between buyers aiming for a breakout and sellers defending certain price zones. In this context, a minority of observers highlighted a pattern that echoes the bear-market conditions of 2022, while others warned that a single holiday-driven session is not the best proxy for broader market health or a definitive trend reversal.

Social signals added texture to the narrative. One prominent trader noted that net buying pressure remained robust across most venues, with OKX standing out as an exception where the balance shifted toward selling pressure. The dialogue around the differing dynamics across exchanges highlighted how venue-specific liquidity can shape price trajectories in real time, contributing to a landscape where market participants must weigh cross-exchange liquidity, funding conditions, and cross-venue order flow as part of a single, evolving story.

Beyond Bitcoin itself, observers highlighted ongoing patterns in price response to liquidity shocks across the crypto market. The day’s action fed into a broader conversation about how investors seasonally recalibrate risk, particularly during holiday windows when traditional liquidity pools are thinner and risk sentiment can swing on a coin flip. While the event did not trigger any explicit new catalysts, its implications for short-term trading strategies—particularly those relying on liquidity-driven breakouts—remain a focal point for traders who seek to understand how much of BTC’s price movement is driven by depth versus fundamental shifts in demand.

What to watch next

• Follow BTC price action in the next several sessions to determine if a sustained move beyond the current range emerges on higher liquidity.
• Monitor the weekly RSI to see whether momentum stabilizes above oversold territory or slides deeper, which could influence near-term bias.
• Track liquidation flows and changes in order-book depth across major venues to assess whether the market is rebalancing its risk tolerance.
• Observe cross-exchange buy/sell pressure differences, particularly after the holiday period, to gauge whether a broader consolidation or a fresh breakout is forming.
• Keep an eye on macro catalysts and regulatory developments that could shift appetite for risk assets in the coming weeks.

Sources & verification

• TradingView BTCUSD price action within the holiday session showing moves toward and away from $70,000 (BTCUSD chart).
• CoinGlass liquidity and liquidation data indicating roughly $120 million in liquidations over four hours.
• Material Indicators’ analysis of BTC/USDT liquidity and whale activity on major exchanges.
• Social posts from Daan Crypto Trades and Keith Alan discussing RSI patterns and bear-market similarities.
• Public social post from CW highlighting net buying dynamics and exchange-specific commentary.

Rewritten Article Body: Liquidity squeezes and RSI signals shape BTC price action on a holiday

Bitcoin, trading as Bitcoin (CRYPTO: BTC), confronted a unique set of conditions on a U.S. bank holiday: liquidity was thin, and that scarcity amplified even modest market forces into notable intraday moves. The price briefly tested the $70,000 mark before retreating, a pattern consistent with the kind of rapid, liquidity-driven reversals that have become familiar in low-volume sessions. Rather than a clean breakout, the action unfolded in a narrow corridor, with bids and asks repeatedly clearing and reforming at new levels as traders recalibrated risk exposure in the absence of the usual institutional floor.

Market observers described a day of “breakouts and shakeouts”—moments when prices appeared ready to run but were quickly checked by the lack of robust order-book depth. The dynamic is a reminder that, on days when major markets are closed, a handful of large participants can move prices meaningfully without the broader market’s participation. The net effect was a series of swift moves that left many participants unsure of the prevailing directional bias, reinforcing a common refrain: liquidity is the prime mover in such environments, more so than fresh macro catalysts or new fundamental data.

Data from CoinGlass illustrated the scale of activity during the session: approximately $120 million in liquidations occurred across a four-hour window. This is a hallmark of a market where thin liquidity can produce outsized volatility, as participants face sudden sifts in supply and demand balance. In practical terms, those who believed the momentum favored a sustained tilt toward the upside found themselves facing rapid opposition as new walls formed above and below the current price to absorb incoming bids or offers. The absence of deep liquidity magnifies the impact of individual large trades, making every order a potential flash point for the next move.

On the technical front, a closer look at momentum indicators painted a nuanced picture. Weekly RSI readings dipped toward oversold territory, with the metric landing at 27.8 on one trading day—its lowest reading since June 2022. Some analysts pointed to this as a potential bottoming signal, drawing parallels to prior bear-market cycles where oversold conditions laid the groundwork for a period of consolidation and eventual macro recovery. Others cautioned that history does not guarantee a repeat outcome and that the present pattern could diverge from 2022 depending on subsequent liquidity and macro dynamics. The discussion underscored how traders weigh technical signals in conjunction with the underlying liquidity environment, rather than relying on any single indicator in isolation.

Beyond the numbers, the day’s narrative included qualitative observations about exchange-specific activity. Traders noted that buying pressure remained more robust than on the previous session, with the exception of OKX, where selling pressure appeared to dominate. This divergence highlighted how different venues can diverge in real time, driven by liquidity distributions, funding conditions, and the behavior of large players who shuttle capital across platforms. A prominent market participant summarized the sentiment on social media, noting that net buying was generally positive across most venues, but the OKX discrepancy reminded the market that liquidity fragmentation persists and can influence short-term outcomes in unpredictable ways.

In a broader context, the episode fed into ongoing discussions about how crypto markets navigate cycles of risk appetite and liquidity stress. While the price action did not deliver a definitive directional signal, it reinforced a familiar pattern: during periods of limited depth, price discovery is a two-way process propelled by cautious, incremental moves rather than a single decisive breakout. The presence of “breakouts and shakeouts” as a recurring motif highlights how traders are adapting to a market structure where depth can evaporate quickly, forcing participants to reprice their expectations with each new order that clears the book.

Looking forward, the market will likely want to see a more explicit signal of conviction—whether it be a sustained move above a key level with robust volume or a decisive breakdown that confirms a shift in risk sentiment. For now, the data suggests that the landscape remains dominated by short-term liquidity dynamics rather than a clear, long-term directional thesis. The ongoing debate about potential bottoming signals versus continued consolidation is a reminder that, in crypto markets, the path of least resistance is often determined by how much liquidity remains available to absorb the next wave of orders.

//platform.twitter.com/widgets.js