Crypto prices continued their strong downtrend Saturday, with Bitcoin (CRYPTO: BTC) crashing to a low of $59,163, its lowest level since 2024, and 52% from its all-time high. The crypto market cap has plunged from over $4 trillion to $2.1 trillion today.
Crypto Prices Have Plunged as AI Demand Jumps
The main reason behind the ongoing crypto market crash is that attention among investors has been on the artificial intelligence (AI) industry. Data shows that most AI stocks like Sandisk (NASDAQ:SNDK), Micron (NASDAQ:MU), Intel (NASDAQ:INTC), and Seagate Technology (NASDAQ:STX) have soared to a record high.
Another sign for this is that the Roundhill Memory ETF (CBOE: DRAM) soared to a record high. It has added over $15 billion in assets under management (AUM), making it the fastest-growing ETF ever. Also, space-related ETFs like UFO and NASA have added major assets ahead of the SpaceX IPO.
This demand has happened at a time when demand for spot Bitcoin, Ethereum, and gold has waned. Bitcoin ETFs have shed over $1.7 billion this month and $2.4 billion last month.
Bitcoin price also retreated after Strategy unveiled its $11.2 billion unrealized loss and after the company sold coins last week. Before that, the company had been accumulating coins on almost every week. It now holds 846,706 coins worth over $51 billion.
Key Metrics Suggest That Bitcoin Price May Rebound
The ongoing crypto market crash has led to more peopled to capitulate. Still, there are signs that the crypto market may rebound soon.
First, Bitcoin has dropped to the extremely oversold level in years. The Relative Strength Index has dropped to 15, its lowest point since March 2020. In most cases, Bitcoin has always rebounded whenever it became this oversold.
For example, the RSI dropped to 15.28 in February this year, triggering a rebound from $60,000 to $82,800 in May this year. The same happened in November last year when the RSI dropped to 23. As a result, the coin rebounded from $80,700 to $97,000 in January this year.
The other key metric is the Crypto Fear and Greed Index, which has been in a freefall. This index has dropped to 13, its lowest level since February this year. It has been in a strong downward trend since April, when it moved to the greed zone of 61.
A closer look at Bitcoin's history shows that it always rebounds whenever the index drops to the extreme fear zone. For example, the index retreated to 8 earlier this year, leading to a BTC price rebound from $60,000 to $82,000.
Therefore, these metrics suggest that Bitcoin price may stage a strong comeback in the coming weeks or months.
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