Like a broken jukebox, the market is down once again and the current price trajectory is bringing in new lows that we haven’t seen in the market in around a year. Bitcoin has had a rough year with ups and downs across the board and it seems like this could be the one that causes it to crash below the $4,000 key resistance level leaving many Bitcoin bulls quite concerned.
But the question remains as to whether this concern is justified or a waste of time?
As mentioned by Crypto Briefing:
“Stochastics aren’t often used in crypto technical analysis. In brief, they are used to indicate momentum: a convenient means to show changing trends before they are reflected in the prices.”
With this in mind, the stochastic indicators can also be used as a metric for when an asset is oversold or overbought.
Bitcoin’s stochastics suggest that the recent price slide has taken the coin just the 20 price range. This is a strong indication that Bitcoin has been oversold in the market. If we take a technical look at this is it means that the leading cryptocurrency is trading below its market value. It’s essentially an overreaction to bad news for example last week’s Bitcoin Cash hard fork, which will most likely correct once everything calms down.
(source - Crypto Briefing)
This chart shows that Bitcoin is below its support levels. The sell off over the past seven days took Bitcoin below its floor price of around $6,200 per coin; traders lost a grip of any guide rails for their decisions. With the downwards trajectory getting steeper as time goes on. Bitcoin Hodlers are offloading to salvage some of their investment value.
The senior market analyst at eToro, Mati Greenspan spoke on the matter saying:
“Short-term price fluctuations are rarely correlated to the stock market. But the macroeconomic trends do tend to line up.”
Swiss authorities have also approved Amun Crypto’s world’s first Bitcoin exchange-traded product. The UK fintech company ETP basket will start to trade next week where 50 percent will be made up of Bitcoin and the other half will be XRP, Bitcoin Cash, Litecoin and Ethereum.
What are your thoughts? Let us know what you think down below in the comments!