July 16, 2024
Key Indicator Shows That Bitcoin Appears Most Oversold Since the Covid Crash
Bitcoin News

Key Indicator Shows That Bitcoin Appears Most Oversold Since the Covid Crash

The relative strength index for Bitcoin has fallen significantly below 30 and reached its most extreme oversold level since March 2020.

Bitcoin is extremely oversold, according to a technical analysis indicator, as a result of rising bond yields that are putting pressure on risky investments like cryptocurrency.

The relative strength index (RSI) for Bitcoin over the past 14 days has fallen far below 30, signaling oversold circumstances. The indicator has reached its lowest level since the March 2020 catastrophe brought on by the coronavirus.

The RSI is a momentum gauge that measures an asset’s current price movement in relation to its average price movement over a given time period, typically 14 days, and ranges from 0 to 100.

A rating under 30 indicates oversold circumstances and indicates that the price has fallen too far from its recent average. A value above 70, however, denotes overbought conditions.

One of the errors made by the crypto community on X (previously Twitter) and the majority of novice traders is to interpret oversold and overbought readings as early indicators of an upcoming bullish or bearish reversal, respectively.

That’s not the case, though. A signal of oversold on the RSI simply suggests that prices have dropped too quickly, while a value of overbought shows that prices have quickly risen.

The most recent RSI reading below 30, or oversold, is an indication of growing bearish momentum. According to a proverb, indications can remain oversold for a lot longer than dip purchasers can remain solvent.

The senior market analyst at FxPro, Alex Kuptsikevich, claims that the trend for Bitcoin has changed from bullish to bearish.

“Bitcoin closed the [last] week with a notable drop below its 200-week and 200-day moving averages, signaling a shift to a bearish trend. From current levels near $26,000, the following area of decline appears to be the last pivot area at $24,700,” Kuptsikevich stated in an email.

At the time of publication, one bitcoin had been traded for $26,000. The yield on the 10-year U.S. inflation-indexed bond nearly reached 2% last week, reaching its highest level since 2009. Prices dropped by roughly 10%.

Image: Wallpapers.com

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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