Bitcoin is Expected to Dive Below $50,000 Before Bottoming

Bitcoin (BTC) started the first week of February near 16-month lows, with traders expecting further downside.

• BTC price weakness compounds after a grim weekend, with BTC/USD reaching levels not seen since November 2024.

• RSI values form the main basis for expecting a market rebound.

• Macro shifts begin to materialize as analysis warns that Bitcoin could be predicting future market pain.

• Gold, silver and stocks head downhill, while US dollar strength rebounds.

• Coinbase Premium falls deep into negative territory, underscoring a lack of US demand for Bitcoin.

Bitcoin nears 2021 high as trader eyes $50,000

Bitcoin price action left most traders firmly bearish at the weekly and monthly candle close.

Monday began even worse, with BTC/USD beating its April 2025 low to hit its lowest levels since November 2024, data from TradingView shows.

Reacting, some were already concerned about Bitcoin’s lack of strength from last year onward, and said the worst was not yet over.

“76k is the last support before 50k area,” trader Roman wrote in his latest analysis on X. 

Earlier, Cointelegraph reported on various downside BTC price targets extending below the $50,000 mark.

Crypto trader, analyst and entrepreneur Michaël van de Poppe told X followers to look for a bottom in precious metals before the crypto “bloodbath” ends.

For trader CrypNuevo, meanwhile, even a potential relief bounce was not immediately due.

Updating followers on his targets for the week ahead, he suggested that a BTC price reversal would begin only after a revisit of the area near old all-time highs from the 2021 bull market.

“Now, we’re very close to this level and I’ll pay attention to it,” he confirmed.

Elsewhere, attention focused on open “gaps” in the CME Group’s Bitcoin futures market, these lying at $84,000 and $95,000.

“Large CME gap implies that this latest move was rather a ‘fake out’ to the downside,” Andre Dragosch, European head of research at crypto asset manager Bitwise, said.

Bitcoin RSI eyes 2022 bear market bottom

Looking for reasons to expect a macro bottom and bullish turnaround for BTC price action, market participants eyed a classic leading indicator.

On weekly time frames, Bitcoin’s relative strength index (RSI) is approaching a key level.

RSI is one of the most popular trading indicators, gauging how “overbought” or “oversold” an asset is at a given price point.

Weekly RSI now measures 32.2, around two points above “oversold” territory.

Commenting, trader Mags noted that those levels were last seen at the end of the 2022 bear market.

“At $76k, the BTC 1-day RSI is the most oversold it’s been since $26k,” the analytics account named after famous economist Frank Fetter continued about lower time frames alongside data from onchain analytics resource Checkonchain.

Looking at the stochastic RSI on the monthly chart last week, however, trader and analyst Titan of Crypto said that Bitcoin’s macro bottoming phase would take time.

“Historically, when the monthly stochastic RSI settles below 20, it tends to confirm the start of a bear market. Price usually needs time to build a proper bottom,” he explained. 

Bitcoin “warning” over macro liquidity crunch

US corporate earnings season is “in full swing” this week, with Amazon and Google both due to report.

The stakes are particularly high for the tech giants after last week saw downside for both Intel and Microsoft, despite both beating earnings expectations.

The broad asset sell-off currently taking hold presents an additional headache for crypto investors, with trading resource The Kobeissi Letter describing uncertainty as now “elevated.”

Considering Bitcoin’s dramatic comedown, analytics sources are becoming more vocal about crypto as a leading indicator for trouble ahead. 

“At a time when fund manager sentiment is pushing near bullish extremes, Bitcoin could be sending a warning on the outlook for financial market liquidity,” analytics resource Mosaic Asset Company wrote in the latest edition of its regular newsletter, The Market Mosaic. 

Mosaic said that BTC/USD is in the process of cementing a bearish head and shoulders reversal pattern.

“The continued breakdown in Bitcoin could be sending a warning on financial market liquidity later in the year,” it stressed.

Earlier, Cointelegraph reported on concerns that US inflation could rebound later in 2026. Last week, the December print of the Producer Price Index (PPI) came in above estimates.

“The index for final demand less foods, energy, and trade services moved up 0.4 percent in December, the eighth consecutive increase,” an official statement from the Bureau of Labor Statistics (BLS) reported. 

This week, meanwhile, will see unemployment numbers form the major macroeconomic data release, with multiple Federal Reserve officials taking to the stage for public speaking engagements.

Jeff Mei, chief operations officer at the BTSE exchange, told Cointelegraph on Monday that upheaval around the new Fed Chair, Kevin Warsh, is contributing to crypto downside.

Gold rout unseen in 40 years

Beyond crypto, record-breaking volatility in precious metals continues.

Gold dropped to $4,400 per ounce during Monday’s Asia trading session, marking its lowest levels in nearly a month.

Over just three daily candles, XAU/USD has erased more than 20% versus its $5,600 all-time high. Gold and silver combined wiped a giant $4 trillion in market cap.

Mosaic tied the announcement of Warsh as Fed chair directly to the market U-turn, with markets highly sensitive to “bad” news after their record run.

“Concerns over a hawkish Fed chair who is less accommodative to the capital markets sparked a reversal higher in the U.S. dollar off a key level and contributed to a massive decline in precious metals,” it summarized. 

US stocks futures reinforced the gloomy outlook as the week began, while US dollar strength sought to cement a rebound from multiyear lows.

The US dollar index (DXY) dropped to 95.50 on Jan. 30, a level not seen since 2022.

“While a declining dollar has been a big driver behind gain in precious metals, the failed breakdown last week was likely a key catalyst in the sharp pullback in gold and silver,” Mosaic acknowledged.

Traditionally, a strong dollar implies weakness for risk-on assets such as crypto, with a more hawkish Fed position potentially ensuring a DXY recovery.

Commenting, analyst and author Joey Keasberry expressed surprise about the dollar now possibly delivering a “significant bottom.”

“That could mean an old-fashioned risk-off environment is about to turn heads,” he told X followers.

Coinbase Premium points to US demand “vacuum”

Despite falling to its lowest levels in nearly a year, Bitcoin has yet to inspire investors to go long again.

Related: Bitcoin’s ‘miner exodus,’ UK bans some Coinbase crypto ads: Hodler’s Digest, Jan. 25 – 31

In some of its latest research, onchain analytics platform CryptoQuant described a “structural vacuum” in US spot demand.

Looking at the Coinbase Premium — the difference in price between Coinbase’s BTC/USD and Binance’s BTC/USDT pairs — CryptoQuant said that the situation had deteriorated versus last year.

“In Feb – Apr 2025, Coinbase Premium was negative, but it came in bursts. Discounts showed up, got worked off, and didn’t stick. That’s more consistent with tactical selling than a market with no bid,” contributor TeddyVision wrote in a Quicktake blog post. 

A negative Coinbase Premium implies that Asian demand is outpacing that from the US, making Wall Street trading hours a source of downside BTC price pressure.

The premium has been negative since mid-December, with two failed attempts to break out of the red in the interim. On Jan. 30, it reached -0.177, its lowest levels in over a year.

“Short dips can happen for many reasons. But when the discount persists even after price has already adjusted, it usually means buyers aren’t stepping in,” CryptoQuant added.