Bitcoin Shows Strong Oversold Signals, Similar to Covid Crash Levels

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The recent market decline has driven Bitcoin down to $25,168, In the span of 2 to 3 weeks. This drop is closely tied to the Federal Reserve’s dynamic policy changes and regulatory uncertainties, causing extreme fear in crypto markets

As a result, Bitcoin has descended to its lowest point on the daily Relative Strength Indicator (RSI) technical gauge since March 2020, a period synonymous with the ‘Covid crash’. Meanwhile, the weekly RSI now stands at 30, a level typically associated with signaling an OVERSOLD condition.

Bitcoin’s Oversold Condition: Key Market Indicator Plunges

Bitcoin, the world’s most well-known cryptocurrency is once again making headlines while experiencing a downward trend in its price trajectory.

This has led to a situation where the market sentiment surrounding Bitcoin is classified as “oversold,” which means that the asset’s price has fallen to a level lower than what might be considered its fair value.

Apparently, the 14-day Relative Strength Index, a critical market indicator, has plunged below the key threshold of 30. This particular indicator RSI, operates on a scale from 0 to 100, which measures an asset’s recent price movements against its average movement over a specific period, typically two weeks. A reading below 30 serves as an indication that the market has entered oversold territory, suggesting a rapid and substantial price drop. Conversely, a reading above 70 signals overbought conditions.

It’s important to understand that oversold or overbought signals are not automatic predictors of imminent bullish or bearish trends. An RSI reading below 30 does not necessarily guarantee an immediate bullish reversal. Instead, it primarily suggests a swift and notable price decline. Conversely, an overbought reading highlights a swift price surge.

Meanwhile, the current RSI reading below 30 doesn’t provide a green light for an immediate bullish shift. Instead, it serves as a strong indication of growing bearish momentum in the market.

Bitcoin Might Take a Bearish Turn, Expert Analysis

In the fast-paced world of cryptocurrency, trends can shift swiftly, and that’s exactly what’s happening with Bitcoin. Senior market analyst at FxPro, Alex Kuptsikevich, has his finger on the pulse.

According to Kuptsikevich, Bitcoin’s once-promising trend has taken a bearish turn. He notes a significant event: a substantial drop below not just one but two vital moving averages – the 200-week and 200-day. These averages are like guiding lines in the financial sand, indicating trends. This drop is seen as a signal of a pronounced shift towards a bearish path.

Kuptsikevich shares that at the current levels, hovering near the $26,041 mark, the cryptocurrency faces a pivotal crossroads. The next significant support point appears to be around $24,700. This assessment underlines the critical juncture Bitcoin finds itself in.

As investors and enthusiasts keenly watch these developments, Kuptsikevich’s expert view serves as a guiding light amidst the fluctuations of the cryptocurrency realm