Bitcoin (BTC) News – Is Bitcoin (BTC) oversold?

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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?

When you look at the downfall from the peak, you will realize that Bitcoin (BTC) is down by over 80%. It clearly indicates that the momentum has been entirely wiped out. The investors who were chasing easy money have already burned their hands. Many of them did not get an exit opportunity once Bitcoin (BTC) started falling. That is why investors are likely to stay away from Bitcoin (BTC) for the foreseeable future.

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.

From the levels of $ 3000, Bitcoin (BTC) recovered swiftly to $ 4000. However, it has been correcting once again. If there is another dip and the RSI goes to around 10 levels, that might be an indicator that it is in the oversold territory. For now, however, it seems like neither it is in the overbought territory nor it is in the oversold territory. If you want to make any entry in Bitcoin (BTC), it is a good idea to wait for the time when RSI moves to the oversold territory. Thereafter, your risk will be considerably reduced when you’re going long.

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.

About Priya 131 Articles
I am an IT engineer by qualification and like to explore the crypto and blockchain space in my free time.

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