Recent analysis from Swissblock points to a concerning jump in Bitcoin risk index, signaling potential market turbulence on the horizon.

Swissblock Technologies highlighted this spike in Bitcoin risk in a recent tweet. They noted that their index, which had been stable since October, is now showing “emergency mode” levels for Bitcoin. Specifically, risk has climbed past the August peak, which was driven by yen-related market volatility, and is nearing levels seen in September, when Bitcoin corrected down to $53,000.

The risk index currently sits at 79.44. Swissblock suggests their analysis indicates that if the index were to reach 100, it could mean we’ve hit the bottom of the current pullback and a recovery could begin. But until we see that peak, they advise that patience is key.

As of writing, Bitcoin had climbed 5.73% in the last 24 hours, reaching $84,633. It even touched a high of $86,534 during Saturday’s trading.

Bitcoin price action

Bitcoin experienced a sharp drop over four straight days this week, marking its most significant four-day fall since August. This week-long downturn extended into Friday, fueled by a broader market pullback from riskier investments. Bitcoin fell as much as 8% to $78,167 at one point, bringing its total decline from the all-time high reached less than six weeks prior to around 30%.

However, Bitcoin managed to bounce back, essentially ending Friday’s trading session flat. Despite this recovery, February saw Bitcoin decline nearly 18%, its largest monthly drop since June 2022.

Adding to the negative mood, U.S. spot Bitcoin ETFs also experienced bearish sentiment. Investors withdrew a record $3.3 billion in February, on track for the largest monthly outflow since these ETFs were first introduced.

Bitcoin’s recent price drop pushed it below crucial technical levels. Notably, it briefly fell below its 200-day moving average, currently at $82,117 – a key indicator of the long-term trend – for the first time since October, before bouncing back. On a more positive note, the daily Relative Strength Index (RSI), which measures price momentum, has fallen below 30. This suggests Bitcoin might be in oversold territory. If so, we could see a temporary price bounce in the coming sessions, although consolidation is still likely.

To determine the next trend direction, keep an eye on whether Bitcoin breaks above the daily SMA 50 ($97,697) or below the daily SMA 200 ($82,115).