The price of Bitcoin (BTC) continues to drop after smashing through critical support levels more than ten days ago — taking the first and foremost cryptocurrency into historic oversold conditions. How oversold can it get? Let’s take a look at a little Bitcoin price analysis.
Unless you live under a rock or don’t follow Bitcoin whatsoever, you’re probably already well aware of the fact that the price of BTC collapsed through critical support at around $6000 more than ten days ago — creating a cascading effect and dragging the entire altcoin market down with it.
Relative Strength Indexes
Bitcoin has never been more oversold on the standard daily Relative Strength Index (RSI) — a technical indicator used in the analysis to illustrate current and historical strength or weakness.
As shown below, the RSI is hanging out well below the 20.0000 level — and has been for quite some time. This indicates that BTC is currently oversold, suggesting that the market-leading cryptocurrency is due for some buy action.
The above chart also illustrates the fact that the daily Stochastic Relative Strength Index is also spending a lot of time in oversold territory. Making matters worse, it is currently experiencing a bit of a bearish cross, indicating that more selling may be inbound before momentum reverses.
Perhaps even more interesting is the fact that the weekly RSIs are also approaching oversold conditions — a rarity when it comes to Bitcoin (BTC).
As illustrated above, the weekly RSI has headed straight downwards and is just about touching the bottom line — indicating that we are close to entering oversold conditions on this longer timeframe.
Meanwhile, the Stochastic RSI is also re-entering oversold conditions. If history is any indication, the weekly Stoch RSI likes to hand out down there for some weeks — so it may be some time before we see a legitimate relief rally occur. Until then, one should expect little more than dead-cat bounces and guppy rallies in the near-term.
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Images courtesy of TradingView.