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- Heavy short positioning dominates despite rising spot demand.
- Weekly RSI shows historic oversold levels, signaling extreme market stress.
- Realized losses among short-term holders suggest a late-stage capitulation.
Bitcoin’s (BTC) price action has captured the attention of traders worldwide, sliding from $120K to $82K in just weeks. While spot trading activity shows signs of growth, the broader market is dominated by heavy short positioning. Open interest has surged after initial drops, suggesting that markets may target top-side liquidation levels as leverage resets. Analysts note that a cluster of short-side liquidity above the current price could fuel the next significant move, as patient buyers accumulate steadily.
This is absolutely wild.
— Sykodelic 🔪 (@Sykodelic_) November 21, 2025
I am speechless.
The current 1W RSI has just tagged oversold levels that we have only seen before at:
– 2018 Bear market bottom
– COVID bottom
– 2022 local bottom at $18k
And BTC is still in HTF structure, at 82 fucking thousand!?
The only time the… pic.twitter.com/d4nuNuHVEy
RSI Oversold Levels Signal Extreme Pressure
In an unprecedented market development, Bitcoin’s weekly RSI has reached oversold readings comparable only to historic bear-market bottoms like 2018 and the COVID crash. Despite this, BTC maintains its higher-timeframe uptrend around $82K, hinting at a structural resilience. The speed of the decline has alarmed traders, signaling extreme selling pressure even in a seemingly intact macro trend.
Realized Losses Spike Among Short-Term Holders
Realized losses are climbing to levels not seen since the FTX collapse, primarily driven by short-term holders exiting positions rapidly. This sharp capitulation may be painful for some investors, but historically, deep sell-offs like these often mark the late stages of market stress. Such a washout could pave the way for a more solid recovery as weak hands exit and high-conviction buyers step in.
Also Read: Is Bitcoin Heading Toward a Bear Market? Bull Score Hits Extreme Lows
Market Volatility Amplified by Global Events
External factors, such as surging Japanese 10-year yields and global liquidity tightening, have amplified the pressure on Bitcoin and other major crypto assets. Forced deleveraging and algorithmic selling have created sudden, sharp market movements, erasing billions in minutes. While sentiment remains fragile, seasoned traders see these extreme conditions as both a risk and a potential opportunity for strategic accumulation.
Bitcoin is navigating a rare combination of extreme oversold conditions, intense short positioning, and rapid capitulation. While the near-term outlook remains volatile, market structure suggests that patient accumulation could eventually trigger a recovery. Traders and investors alike must weigh risk against opportunity as BTC searches for a sustainable bottom.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
