The total cryptocurrency market capitalization (TOTAL) and Bitcoin (BTC) have experienced significant corrections in the past 24 hours, wiping out weekend gains. BTC has once again dropped below the $85,000 mark and is currently trading at $84,255.

However, in a new report, a pseudonymous CryptoQuant analyst suggested that this correction could be a setup for a renewed bullish push. This analysis explains how. 

Smart Money Sees an Opportunity in Bitcoin’s Dip

In a recently published report, pseudonymous CryptoQuant analyst Banker identified three key signals suggesting that Bitcoin may witness a price rebound in the short term, one of which is the coin’s declining open interest.

According to Banker, Bitcoin’s Open Interest Change (7D) “has declined significantly, dropping by -14.42% on March 1st.”

Open Interest measures the total number of an asset’s outstanding derivative contracts, such as futures and options, that have not been settled. A decline in BTC’s open interest suggests that market leverage is decreasing. Historically, such pullbacks often present an opportunity for buyers to re-enter at lower levels, potentially fueling a new upward movement.

“Such a sharp reduction often signals a decrease in speculative activity and can present a strong buying opportunity during market dips, as it may indicate capitulation or a reset in positioning,” Banker wrote.

Another signal pointing to a potential rebound is the decline in the Crypto Fear and Greed Index. As of this writing, it is currently at 15, indicating extreme fear among market participants. This suggests that investors are highly cautious, prompting them to increase their selling activity.  

Historically, extreme fear levels like this indicate that the market is oversold and near the bottom. This often presents a buying opportunity for traders looking to “buy low and sell high.”

“The recent decline suggests a cooling-off period, which could pave the way for a healthier market environment,” Banker wrote.

Therefore, if BTC traders take advantage of this trend and increase their accumulation, it could set the stage for a short-term rebound. Furthermore, the anticipation around the March 7 Crypto Summit at the White House could “serve as a catalyst for short-term market movements,” Banks said.

The summit, organized by White House AI and Crypto Czar David Sacks, which President Trump will lead, aims to shape crypto regulations. This represents a significant shift in US digital asset policy, highlighting the government’s pro-crypto approach and commitment to regulatory clarity.

Per Banker:

“Depending on the outcomes and announcements, there may be a small window of upside potential. For now, investors should remain cautious but vigilant, as the current dip in open interest and sentiment could offer strategic entry points for those with a longer-term perspective.” 

BTC Nears Critical RSI Level—Will It Rebound or Fall to $80,000?

Besides these on-chain and macro indicators, BTC’s nearly oversold Relative Strength Index (RSI) on the daily chart confirms Banker’s bullish outlook. At press time, this momentum indicator, which measures an asset’s oversold and overbought conditions, is at 36.88.

This RSI reading signals that BTC is nearing oversold levels and may witness a positive price correction in the near term. If this holds true, the coin could retrace and rally toward resistance at $92,247.

On the other hand, if the downtrend persists, BTC’s price could slip to $80,580.