Is the Bitcoin Selloff an Opportunity?

Bitcoin has been on a steady decline since June 2019.

Just recently, it fell from a high of $10,500 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. Some believe that Bitcoin would need to soar over 1,000% before the SEC would consider approving a Bitcoin ETF.

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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 Williams' %R.

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 the Williams' %R  above its -20 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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