Bitcoin RSI Breaks 4-Month Downtrend: Can Bullish Sentiment Drive BTC to 110K?

Market experts and traders maintain their focus on major technical signals during Bitcoin’s current period of Q1 2025. The Bitcoin market displays conflicting opinions as the cryptocurrency approaches two weeks of peak value. RSI has recently broken its four-month downtrend, yet short-term investors remain cautious about potential price adjustments and outstanding investment losses. The market will manage dual approaches between optimistic and cautious perspectives since the upcoming PCE index economic data release is planned.

Bitcoin Faces Diverging Sentiment Amid Potential for Price Dip

The price movements of Bitcoin indicate that the pioneering crypto stands at the threshold of attaining its highest levels for a fortnight. Bitcoin has surged by 15% from its multi-month lows during early February as it approaches essential resistance areas between $81,000 and $88,000. Market participants maintain a careful outlook despite the price boost because they expect another downward movement in the market.

CrypNuevo, a popular trading expert, shared insights that the market might move downward in the upcoming weeks. According to his analysis, the market sentiment has changed since short positions were liquidated at $87,100, although a price correction remains possible. CrypNuevo indicates that downside liquidity could strike around $80,000, urging traders to exercise caution because market conditions remain unclear. According to trader HTL-NL, $90,000 represents the maximum price before a price reversal might take place.

Image 1- Bitcoin liquidity chart, published by CrypNuevo, March 25, 2025. 

On the other hand, Bitcoin price may rise to $110,000, as per Bitcoin advocate Arthur Hayes, yet there is a strong possibility of a 30% bearish movement when it reaches that target. The asset’s continuing price rise requires analysis of upcoming resistance levels to establish reliable uptrends or determine if a correction in value will happen soon.

RSI Breakout Points to Potential Bullish Continuation

Bitcoin price indicators received an upbeat signal when the RSI indicator ended its four-month declining trend in recent months. Market analyst Ali Martinez followed the RSI for bullish signals that appear as divergences on weekly timeframes because they anticipate price momentum shifts after periods of market weakness.

Image 2- RSI Hits Overbought, provided by Ali Martinez, published on TradingView, March 25, 2025.  

According to Rekt Capital, this major analyst, the daily Relative Strength Index, confirms new support by testing down-trend lines from November 2024. Proof of an upcoming bullish Bitcoin trend appears likely as the RSI moves toward validating the change. Analyst Matthew Hyland noted that the weekly RSI confirmed its first bullish divergence since September 2024, which indicates Bitcoin may prepare for a price increase.

Image 3- Provided by Emmaculate, published on TradingView, March 25, 2025.

The daily RSI level sits at 50.12 while exceeding the midpoint, showing early positive strength signals. The momentum building in Bitcoin market shows positive signs that indicate its breakthrough of resistance levels toward achieving new peaks. The market shows conflicting indications regarding Bitcoin’s ability to continue an upward rally and whether it will first experience a pullback.

Short-Term Holders Under Pressure as Stablecoin Reserves Surge

Bitcoin experiences pain from its short-term holders because they hold substantial unrealized losses that continue to burden them. Research by Glassnode indicates that such price-sensitive short-term coin holders maintain underwater positions due to losses in their cryptocurrency holdings.

Image 4- STH Relative Unrealized Loss, published by Glassnode on X, March 25, 2025. 

Glassnode indicates that losses remain much lower than those in past market crashes. The latest Bitcoin price declines have caused major panic-related coin dumps by short-term investors who chose to sell their positions at losses. The current selling frenzy during this market correction is less intense than previously observed extreme market events, so the current panic wave appears less severe.

Image 5- Stablecoin (ERC-20) Supply, published by cryptoQuant on X, March 25, 2025. 

Investors’ confidence seems to be rebounding because Binance users hold the highest stablecoins in history. According to CryptoQuant, the Binance platform now contains $31.8 billion worth of ERC-20 stablecoins representing its largest total balance in history. 

The rapidly increasing stablecoin reserves indicate investors plan to return to the market, which should bring the necessary liquidity to boost Bitcoin prices over time. Because of their stability, stablecoin reserves serve as key market sentiment indicators. Bitcoin’s prospects look promising since investors maintain their positions while preparing for market growth despite facing short-term holder difficulties.

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