BTC liquidity squeezes trigger fakeouts as weekly RSI nears mid-2022 lows
Bitcoin (BTC) experienced sharp short-term moves on a US bank holiday as thin order books allowed large-volume players to trigger liquidity squeezes that liquidated traders on both sides. BTC spiked to about $70,000 before returning into a narrow range; CoinGlass recorded roughly $120 million in crypto liquidations over a four-hour window. Trading desks and on-chain monitors described the activity as “breakouts and shakeouts,” with blocks of bids and asks cleared and new walls placed to pressure price. Material Indicators and other analysts noted sustained net buying on most exchanges except OKX.
Separately, weekly Relative Strength Index (RSI) dipped to about 27.8 — the lowest since June 2022 — drawing comparisons to mid-2022 bear market behavior where weekly RSI hit “once per cycle” oversold lows. Analysts cautioned that while historical parallels are noteworthy, they do not guarantee a repeat pattern; past instances (2015, 2018) marked cycle bottoms, whereas 2022 led to extended consolidation. The report highlights increased short-term volatility during low-volume sessions and advises traders to monitor liquidity, whale activity, and weekly RSI for directional clues.
Primary keywords: Bitcoin, BTC, liquidity squeezes, weekly RSI, liquidations. Secondary/semantic keywords: fakeouts, shakeouts, thin order books, whale activity, exchange liquidity.
Neutral
The article describes short-term volatility driven by low-liquidity conditions and large players triggering liquidity squeezes that caused meaningful liquidations (~$120M) and price fakeouts around $70,000. Those events increase short-term risk and trading opportunities (stop runs, momentum trades) but do not constitute a clear directional shift in the macro trend. Weekly RSI falling to ~27.8 signals oversold conditions similar to mid-2022, which historically has produced both cycle bottoms (2015, 2018) and extended consolidation (2022).
Short-term impact: Elevated volatility and liquidation risk — traders should tighten risk controls, monitor exchange-specific order flow (OKX noted weaker buying), and watch whale activity and liquidity walls for intraday traps.
Medium/long-term impact: A low weekly RSI increases the probability of a mean-reversion bounce or prolonged consolidation rather than confirming a sustained bull or bear regime change. Unless follow-through volume and broader market catalysts (macro, ETF flows, on-chain demand) appear, the move remains a liquidity-driven episode rather than a macro breakout.
Comparable precedents: Mid-2022 saw weekly RSI lows precede a multi-month consolidation; 2015 and 2018 weekly RSI troughs corresponded with cycle bottoms. Traders should therefore treat current signals as conditional — useful for timing and risk management but not definitive buy/sell triggers without corroborating volume and macro context.