Bitcoin Plunges from $79K as Overbought Momentum Triggers Correction Fears

Bitcoin's price plummeted from nearly $79,500 to around $76,300 over the weekend, marking a sudden reversal after a strong week of gains. This drop has raised concerns about a deeper correction in the market, with some analysts warning that the cryptocurrency may fall as low as $70,000.

The four-hour relative strength index (RSI) reached its highest level in more than seven years, signaling unusually strong momentum and possible short-term exhaustion. RSI measures momentum on a scale from zero to 100, with readings above 70 generally considered overbought. In this case, the indicator moved into the 80-90 range, where demand can become temporarily exhausted even when a broader uptrend remains intact.

Traders are watching $75,000-$76,000 support, with upside scenarios near $83,000-$88,000 and deeper correction targets around $70,000-$72,000. Analyst Krown noted that the extreme RSI reading was constructive for the longer-term trend but unfavorable in the short term.

CredibleCrypto argued that a pullback could follow if the current upward move is complete, while others see a growing risk that the latest expansion is near a local peak.