Bad News Bears Crush Bitcoin but It’s Now Oversold

Bitcoin has been crushed since the start of September 2019.

Just recently, it fell from a high of $10,924 to a current price of $8,036. Some point to a poor reception to the first Bitcoin futures contracts offered by the ICE Bakkt platform. In fact, the highly anticipated launch of those futures was quite disappointing with only $5.8 million BTC trading volume in the first week out. 

Granted, many saw Bakkt as a catalyst to get institutions on board.

But so far, it doesn’t seem like they have much interest at all.

Others point to the U.S. SEC delays with a Bitcoin ETF. That’s after the CBOE’s BZX Equity Exchange withdrew its VanEck/SolidX Bitcoin ETF. As a result, the race to launch a BTC ETF seems to have been delayed yet again. While the SEC is still reviewing two other ETF proposals, this one in particular stood the strongest chance, say analysts.

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However, despite all of the negativity, there are reasons to be bullish.

or one, as we’ve noted, “Binance US will launch in the “coming weeks”, according to CEO Catherine Coley. Binance US is essentially the same as Binance, as noted by Decrypt, but with the approval of US regulators. As part of the deal with US regulators, consumers must pass know-your-customer (KYC) checks to use the exchange. New accounts will also require a valid government ID and a social security number.”

And two, BTC has become technically oversold, as investors panic.

But as they panic, they’re creating opportunity deep in oversold territory. For example, here’s a one-year chart of BTC. Not only is BTC oversold at its lower Bollinger Band (2,20), it’s also excessively oversold on relative strength (RSI) and Full Stochastics (STO).

Notice what happens each time RSI dips under its 50-line, a Full STO dips to its 20-line, and below. Shortly after, BTC begins to pivot and turn higher. These indicators alone are telling us BTC is wildly oversold at current prices, and overdue for a turn higher.

These same indicators are great at calling tops, as well.

For example, notice what happens when BTC hits its upper Bollinger Band (2,20) with RSI nearing its 100-line, and with Full STO at or above its 80-line. Not long after, we begin to see a pivot lower, as we’ve seen quite a few times.

With the latest move lower in BTC, keep an eye on it.  Indicators say its oversold.

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