Bitcoin, Cryptocurrency, News & Updates

Bitcoin oversold after two red weeks

Last week, Bitcoin (BTC) hodlers feasted a new ATH. This week they “celebrate” its another large red candle. The most prominent crypto wasn’t this oversold from the previous year.

Bitcoin oversold? BTC ended the week with the second-biggest red candle throughout its history, checking lows near the $47k price range after an all-time high of $64K registered from the week before.

Generally, this was a rough week for markets all over the panel. From cryptos to stocks, traders suffered an event of shared fear characterized by the gossip that Joe Biden would be getting a bill ready to raise capital gains taxes by nearly 100% for anyone earning exceeding $1 million in profits.

Bitcoin Registers Its Second-Largest Red Candlestick In History

The report caused a widespread drop in the essential financial indices in the U.S. and other relevant nations. Crypto had an even worst-case response, with BTC verifying its decline after breaching the support of a channel started during the latter part of 2020.

Today’s drop puts BTC at $48,000 with lows of $47044, as provided by the Tradingview data. In BTC’s first time, the 10-period moving average and the 55-period moving average are intersecting the drawback, which could mean that the bullish trend is getting weaker, at least temporarily.

Bitcoin candle
BTCUSD Weekly candlesticks. Image: Tradingview

Bitcoin oversold just lost just over 5% in the last 24 hours and 13% over the previous seven days. With near $8.000 lost, this would be the most significant gross price decrease in history, even though it has seen the worst declines in price proportions. To put things in context, a $10 drop when Bitcoin was traded at $100 was in proportion worse than a $1000 drop when Bitcoin was priced at $60,000.

Bitcoin Has Not Been This Oversold Since The 2020 Panic Episode of the COVID-19 Crisis

Indicators point that traders have not yet restored from the panic episode of the previous days. Since mid-March last year, BTC has not been this oversold when fears of a widespread crisis due to the coronavirus pandemic drove markets to the subsoil.

The RSI is a metric that signals whether or not there is a balance between buyers and sellers. It is presently in the order of 25 points out of 100. There are 25 people placing buy orders vs. 75 people placing sell orders for the same value.

Bitcoin candle
BTCUSD with RSI Image: Tradingview

This suggests that traders are currently viewing to exit their positions to raise their holdings of fiat, commodities, or even altcoins.

A similar viewpoint is shown by the Crypto Fear & Greed Index, which is at its lowest level in a year, indicating that investors’ fear of losing money with Bitcoin hasn’t been this strong since the March 2020 crash.

Bitcoin chart
Crypto Fear and Greed Index. Image:

Nevertheless, a low RSI is -generally- a bullish sign. In theory, markets tend to achieve equilibrium after such periods of euphoria with a correction to the contrary.

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