Bitcoin Price News: Contrarian “Buy” Signals All Over as Price Bounces Off $85K

Bitcoin (BTC) has gone up by 0.7% to $88,000 in the past 24 hours as buying interest seems to be strong at $85,000.

The past 7 days have still been bearish for the top crypto despite this rebound, as it has lost 4.5% of its value.

A positive inflation report in the United States this week could have aided yesterday’s rebound as macroeconomic conditions continue to improve.

However, bearish sentiment seems to persist as Bitcoin exchange-traded funds (ETFs) have booked net outflows of $338 million since the week started. This marks a reversal from last week’s trend, as BTC netflows ended in positive territory after the Federal Reserve cut interest rates for a third time this year.

Nearly $570 million was liquidated in the past 24 hours, most of which were long positions. However, $80 million short positions were blown up in the past 12 hours as prices recovered.

Oversold RSI Plus Record-Low Sentiment Readings Scream “Buy”

Open interest (OI) in the futures market seems to be recovering, which is a positive indication at a point when contrarian signals are flashing all over.

Traders’ participation is critical to boost the price of Bitcoin in the near term, and data from CoinGlass shows that this metric has increased by 7% since December 7. In addition, there were a couple of spikes on December 14 and 15, back when BTC dropped to… $85,000!

BTC/USD Daily Chart (Bitstamp) – Source: TradingView

An overheated Relative Strength Index (RSI) in the daily chart could have marked the end of this latest wave of selling, as this momentum oscillator hit a low of 23 in November 22. Since then, it has been trending higher even though the price has traded relatively range-bound.

Interestingly, the Fear and Greed Index also hit a record low of 11 recently in November 2022. As we have mentioned in previous Bitcoin price predictions, this could be considered a buy signal, especially if paired with a divergent RSI.

In the past, record-low readings in the F&G have been good predictors of cycle bottoms. The last time we saw similar drops in this metric was in April this year. Back then, the price bottomed at $82,000 and went on to make a new all-time high just a few months after.

A Bullish Breakout Above $100K Is Crucial

Bitcoin has already found support three times at $85,000, making this the most relevant support to watch as the price bounces once again.

The $100,000 threshold remains the most relevant structural level to watch in the near term, as a break above it would effectively reverse the token’s downtrend. This level coincides with the 200-day exponential moving average (EMA), which makes a breakout even more relevant from a technical standpoint.

BTC has already attempted to make it out of its descending price channel once. Could this second attempt result in a meaningful push to higher levels?

BTC/USD Hourly Chart (Bitstamp) – Source: TradingView

The hourly chart shows that the market grabbed some liquidity after breaking below the $85,000, and that was enough to propel BTC to its current price. Today’s session will likely go back to that area of strong liquidity to take aim at $90,000.

If that ceiling is broken, the odds that we may commence a steady climb to $100,000 will increase dramatically.