June 17, 2024

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Bitcoin (BTC) price is oversold, as is the RSI

Bitcoin (BTC) price is oversold, as is the RSI

This technical analysis indicator shows severe oversold conditions in Bitcoin as rising bond yields affect risk assets, including cryptocurrencies.

Bitcoin’s 14-day relative strength index (RSI) dropped below 30, indicating oversold conditions. The index fell to its lowest levels since the coronavirus-induced crash in March 2020.

The RSI is a momentum indicator ranging from 0 to 100 that shows the recent price movement of an asset compared to its average price movement over a specified period, usually 14 days.

A reading below 30 reflects oversold conditions, implying that the price has fallen too quickly relative to its recent average. Meanwhile, a reading above 70 indicates overbought conditions.

of errors that Crypto community On X (formerly Twitter) most novice traders consider oversold and overbought readings as pre-hints of an impending bullish and bearish reversal.

But this is not the case. An oversold RSI reading means that prices have fallen very quickly – that’s it, while an overbought reading means that prices have gone up quickly.

If anything, a recent reading below 30 or the oversold RSI is a sign of consolidating bearish momentum. As the old saying goes, indices can remain oversold for longer than buyers on dips can remain solvent.

According to Alex Koptsiewicz, Senior Market Analyst at FxPro, the Bitcoin trend has turned bearish.

Bitcoin shut down [last] The week saw a significant drop below the 200-week and 200-day moving averages, indicating a turn to a downtrend. “From the current levels near $26,000, the next lower area appears to be the recent pivot area at $24,700,” Koptsiewicz said in an email.

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Bitcoin is trading at $26,000 at the time of publication. Prices fell more than 10% last week as the yield on inflation-linked 10-year US bonds rose to nearly 2%, the highest level since 2009.