According to Cointelegraph: Despite a price dip of around 7% in April, causing the BTC price to currently hover around $66,000, Bitcoin is seeing a reassessment of essential metrics as the downturn clears out leveraged positions.
The BTC sell-off resulted in a significant liquidation event, culminating in a total of $400 million for Bitcoin and altcoins combined. The fallout resulted in negative funding rates, leading some traders to suggest that all leverage must be destroyed before price discovery.
Retail-heavy exchanges such as Binance saw perp funding rates deflate from highs of 77% down to zero. While perp funding rates have compressed, there has been mention that the rest of the forward curve remains high, leading to speculation if the current downturn will bring the overall curve downward.
However, there is optimism with Bitcoin's relative strength index (RSI) readings on daily timeframes, which return to the 50 midpoints. This point is seen as crucial during uptrends and has been typical for Bitcoin since the end of January.
Turning to volatility, Bollinger Bands on daily timeframes hint at an upcoming breakout stage for BTC/USD. Comparisons to February’s situation indicate these bands' tightening, suggesting a potential repeat of February's dynamics when Bollinger Bands were at a similar tightness level.
The reframing of these metrics may spur investor optimism. The price dip, and the subsequent liquidation, might be the reset needed for a new price discovery stage, presenting opportunities for bullish momentum to regain its footing.
