Bitcoin (BTC) has fallen from $ 20,000 to $ 3580 currently. The question is how lower can it go. Many of the investors think that it can break the psychological support of $ 3000 and head even lower. The chances of that happening are on the lower side. However, that does not mean that it cannot happen. On the flipside, many investors think that just like at $ 20,000, Bitcoin (BTC) was inflated, at $ 3500, it is oversold.
Is Bitcoin (BTC) oversold?
If you want to gauge the momentum Bitcoin (BTC), it is important to look at the relative strength index. It provides you with a glimpse into the movement in any asset class. Currently, it is around 41 levels. It clearly indicates that neither it is in the overbought zone nor it is in the oversold zone. When Bitcoin (BTC) fell sharply to $ 3000 in December 2018, it had gone all the way to 11. When it is generally below 20, it is considered as oversold.
On the other hand, if you’re thinking about going short, it is a good idea to wait till RSI is on the overbought territory. It will allow you to reduce your risk and increase the chances of making a profitable trade. Currently, it seems like there is no clear indication according to the RSI indicator.
Thus, while Bitcoin (BTC) was in the oversold territory in December 2018 but it is currently not in that territory. If you want to go long, it is a good idea to wait for a day before gaining any entry.