Bitcoin Risk Index Surges as Market Volatility Intensifies

Bitcoin's risk index has spiked, signaling potential market turbulence ahead, according to Swissblock Technologies. The index, which had remained stable since October, is now in "emergency mode," surpassing August highs and nearing levels seen in September when BTC corrected to $53,000.

Currently, the index sits at 79.44. Swissblock suggests that if it reaches 100, it could indicate the bottom of this correction and the start of a recovery. Until then, patience is advised. Meanwhile, Bitcoin rebounded 5.73% in the past 24 hours, trading at $84,633 after reaching $86,534.

Bitcoin faced a sharp downturn, marking its worst four-day slide since August, briefly dipping to $78,167 on Friday. The cryptocurrency has declined nearly 30% from its all-time high set six weeks ago. February saw an 18% drop, the steepest monthly decline since June 2022.

The bearish sentiment extended to U.S. spot Bitcoin ETFs, with investors withdrawing a record $3.3 billion in February, the largest outflow since their launch.

This week's sell-off pushed Bitcoin below key technical levels, temporarily falling under the 200-day moving average at $82,117 before rebounding. However, the daily relative strength index (RSI) fell below 30, suggesting Bitcoin may be oversold and due for a relief bounce.

If Bitcoin breaks above the 50-day and 200-day simple moving averages at $97,697 and $82,115, respectively, it could signal the next trend direction. Until then, consolidation remains a strong possibility.