Bitcoin traded near $77,260 on Saturday, according to market data, after reaching an intraday high close to $79,500 before a sudden flash crash rattled the market.

The asset climbed more than 22% over the past week, but a technical signal is starting to raise caution among traders.

What the RSI Shows and Why It Matters

The relative strength index (RSI) measures price momentum on a scale of 0 to 100 and is considered overbought above 70. On the 4-hour chart, the indicator now sits at its highest level in more than seven years.

Analyst Krown noted early Saturday that this RSI extreme is good for the long term, but not for the short term. Readings above 80-90 reflect temporary exhaustion of demand.

Historically, those levels tend to precede short-term corrections or consolidations, though they do not necessarily mark the end of an uptrend.

The market already saw an initial shock in the early hours of Saturday. Bitcoin retreated sharply from around $79,500 down to a low near $76,300, in what traders described as a flash crash.

“$BTC is holding above its weekly bull market support band. A weekly close above this zone is needed for more upside in Bitcoin,” crypto analyst Ted said on X.

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The move liquidated more than $500 million in long positions within minutes. It formed part of total liquidations exceeding $1.35 billion over the past 24 hours, according to market data.

Analysts Split on What Comes Next for Bitcoin Price

Views among widely followed analysts remain split. Shardi B warned that the daily RSI sits at one of its highest levels in history and recommended caution.

Others note the indicator stood at 84, close to resistance zones that have historically punished late buyers. Several point to the possibility of a local top or a significant pullback that would test the current price structure.

“Low timeframe wave count has been pretty tricky on bitcoin since the start of our expansion because of the extended 5th subwave to the upside, but I think it might be time for a pullback/local top if the initial move is finally complete,” analyst CredibleCrypto noted.

On the more constructive side, some argue that when RSI reaches these extremes, it is never the end of the move, and that momentum typically continues higher before correcting. A target of $83,000 to $85,000 is being floated for the coming weeks, allowing only for minor pullbacks.

From current levels, the short-term scenarios traders are weighing fall into two camps. An extension toward the $83,000 to $88,000 zone, if the $75,000 to $76,000 support holds.

Or a deeper correction toward $70,000 to $72,000, should momentum fade following the overbought extreme and the recent flash crash.

The market, therefore, sits at a decision point. The question is whether the extreme RSI reading signals only a healthy pause or the start of a more significant adjustment after the strong weekly rally.

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Source: BeInCrypto