Bitcoin (BTC) Oversold Marks 15-Month Lows

Bitcoin (BTC) Oversold Marks 15-Month Lows

$BTCUSD

Bitcoin (BTC) tumbled to 15-month lows Friday, negating hopes of a rally signaled by extreme oversold conditions.

The world’s largest cryptocurrency by market cap fell to $3,200 on Bitstamp at 00:15 UTC the lowest mark since September 2017.

Currently, Bitcoin is trading at: 3,218.68-16.80, or -0.5192%, as of 8:27p GMT, the market is open.

BTC was ranged in a 5 day-long narrowing price range 24 Thursday, and showed signs that it might break North with a strong move toward the major resistance at $3,633.

The Bullish expectations were based on a premise that the sellers are facing exhaustion, as indicated by the 14-wk RSI (relative strength index), having triggered a 49% price decline in the last 4 weeks.

Further, evidence of bargain hunting came in earlier this week in the form of a 3-day inverted hammer candle.

But, BTC fell out of the narrowing price range in US trading hours Friday, negating the prospects of a short-term inverted hammer Bullish reversal above $3,633.

BTC’s persistent failure to produce a notable price bounce despite extreme oversold conditions indicates that the Bearish sentiment is very strong in here.

As a result, a convincing break below the 200-wk MA support of $3,170 cannot be ruled out now.

4-hr Chart

The symmetrical triangle breakdown seen in the 4-hr indicates a resumption of the sell-off from the 29 November high at $4,410.

The stacking order of the 50-candle MA, below the 100-candle MA, below the 200-candle SMA, is a classic Bear indicator. The RSI has also fallen back into Bearish territory below 50.00.

BTC now risks falling to the psych mark at $3,000. On the way South, it may encounter support at $3,179 (200-wk MA).

Daily Chart

As seen above, BTC has charted lower price highs (marked by arrows) along the downward sloping 10-Day EMA.

Note: BTC persistently failed to close above that EMA mark at the end of the last month.

Hence, the 10-Day EMA, currently at $3,465, is the mark to break for the Bulls.

Over View

  • The range breakdown on the hourly chart may have opened the way to $3,000.
  • The 14-wk RSI remains below 30.00, marking oversold conditions. Recent price action indicates that the market is paying little heed to the indicator.
  • A UTC close above the 10-Day EMA of $3,465, if confirmed, could be considered a sign of short-term Bullish reversal.

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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