Bitcoin is oversold

[Xangle]

Xangle reveals that “Bitcoin is oversold”
https://xangle.io/project/BTC/disclosures/5e572906e603d6cdffd521c6

[February 27] According to crypto disclosure platform Xangle, Bitcoin is in oversold condition. Bitcoin’s price decreased more than 5% than the day before, reaching $8,700.

The MFI (Money Flow Index) and RSI (Relative Strength Index), technical indicators in measuring whether an asset is overbought/oversold, each recorded 19.2 and 27, respectively. MFI readings were calculated from Xangle’s on-chain data.

In the traditional finance market, an MFI reading below 20 is considered to be oversold, and an MFI reading above 80 to be overbought. On the other hand, an RSI reading below 30 is oversold and an RSI reading over 70 is overbought. MFI and RSI indexes are generally accepted in the crypto market as well; however, in times of panic, such indexes might show a comparatively weak correlation with price.

Meanwhile, bitcoin’s recent price volatility is continuously increasing due to global economic slowdown caused by the Coronavirus and the refusal of Wilshire Phoenix’s Bitcoin ETF.

[fiulpro]

I do think it is actually natural because since it hit an all time high ( considering the year ) people who had to arrange money did sell it very fast , thus the market fell and now the price is decreasing but it is more like a balance itself .
Since the price is falling now the investors will start coming in , since we are soon approaching a big event and the price is soon going to hit all time high , then the price will increase which will inturn cause the situation to reverse again .
It's just how the market works.

[1Referee]

Meanwhile, bitcoin’s recent price volatility is continuously increasing due to global economic slowdown caused by the Coronavirus and the refusal of Wilshire Phoenix’s Bitcoin ETF.

I doubt anybody knew there was a pending ETF request. I didn't know of that ETF myself, nor did I see people talk about it on social media until now after it got rejected.

Also, markets can stay overbought or oversold for prolonged periods of time. People have tried selling into those reads, but most of them fail because of that. If it was easy to short or long those reads and make tons of money, everybody would be doing it, but markets aren't that generous unfortunately.

From the looks, stocks are going to open in the red yet again, so I'm curious to see how that will affect Bitcoin's price today, and more importantly, CME's weekly and monthly close.

[Youghoor]

The entire crypto market is very volatile at the moment. Stocks are going down to the decreased economic production in China mainly and other parts of Europe that have been affected with Coronavirus. I for instance had to sell some bitcoins this morning because i want to have enough cash on me just in case there is some lock down in my country as well.

[XCANA]

Bitcoin being oversold few weeks ago look very correct because of the decrease in it price. Although, we can't blame those who involved in the selling of their stash over the months as the price of Bitcoin was seen hit highest this year. Many people with their problems which are or is to be solve, so, by selling their portfolios shouldn't be an issue. We all know how volatile the entire cryptocurrency market looks.

[dragonvslinux]

It depends on what time-rames we are talking about. On the Daily and using the Relative Strength Index (RSI), we are around 35, therefore bearish (between 30 and 40):



On the 4hr we are indeed oversold at 22 (<30), but could certainly go lower below 10 like we did in November with a bit more capitulation:



The Weekly RSI is basically neutral, however the RSI is obviously trending downwards which is short-term bearish.



40 would be the level for the bulls to defend to avoid being bearish on a longer-term time-frame at least.

[joeperry]

The market of cryptocurrency is generally volatile in nature, overselling of coins such as Bitcoin particularly happen, and thus the value of each coin is continuously changing in a fast unpredictable pace. Many cyrpto enthusiast constantly sell their coins once it hits the highest price possible, when they can tell that they will gain a profit from that point in time. While, there are others that sell coins because of their personal needs. In the context of the Novel Corona virus outbreak, enthusiasts oversold their coins because of the urgent need to have financial capacity to sustain hoarding their needs due implementation of lockdown in many countries in the world.

[The Sceptical Chymist]

"Oversold" is one of those TA buzzwords that get thrown around in the mainstream financial press, and it drives me nuts.  It's just another way of saying something's undervalued--but with bitcoin there's absolutely no way to determine that.  With stocks, there are a number of different ways you can determine whether a stock is going for less than what it probably should be, but with bitcoin?  Nah, I don't think so.

That was one hell of a selloff, though.  I generally try to keep my expectations low when it comes to bitcoin's price, but I was hoping it would stay above $10k for a while.  It seems to be having trouble with that, but I chalk that up to short-term traders taking their profits off the table.  In any case, the market is by no means bearish.  It's just the bull taking a little breather IMO.

[Wexnident]

Here we go with the people pushing BTC down since it dropped big just recently. It isn't oversold tbh, more like, when a few traders started exiting the market which caused the price to go down a bit, a lot suddenly followed because they observed that the market seems to have stopped its massive rise compared to the start of the year.

Traders probably saw that the market was going down from the expectant stay of BTC at $10k, and since it went down to $9k, most decided to exit the market. That's it. Besides, the observed measurements are probably the time frame of BTC dropping down from $10k to $9k only, which is around a week or so? If observed based on measurements of monthly changes, I doubt the results would've gone so low.

[hugeblack]

There are two errors in this topic:

 - It is a mistake to compare the fluctuations that occur in the Bitcoin Market to the traditional financing market, and then to impose theories based on this comparison.
 - It is a mistake to follow analyzes of market patterns, meaning that the analysis is based on price change or collapse rather than a future forecast of what will happen.

Do not forget that political events, limited adoption decisions, Coronavirus, do not fundamentally affect the price.

[exstasie]

"Oversold" is one of those TA buzzwords that get thrown around in the mainstream financial press, and it drives me nuts.  It's just another way of saying something's undervalued--but with bitcoin there's absolutely no way to determine that.

People tend to oversimplify what "overbought" and "oversold" mean. They apply an absolute definition like oversold=undervalued, when the indicator itself is relative.

In a ranging market, this makes sense. You can buy when it's oversold at the bottom of the range, and sell when it's overbought.

In a trending market, it makes no sense. Strong price momentum can keep oscillators like RSI glued in overbought or oversold conditions. One example is BTCUSD in 2017. The monthly chart was overbought for the entire year, even going back to late 2016. If you sold based on that, you would have missed the entire bubble:



It's really important to distinguish between these two different conditions, ranging vs. trending. They entail almost opposite applications of RSI and similar indicators.

[pixie85]

versold doesn't mean anything. Bitcoin was in the oversold area multiple times in 2018 and ketp falling down.

I remember watching it decline and wondering if maybe this is the point where it bounces back and I did that at 6, 5, 4, and finally 3 thousand dollars.

What we can be sure of is that this decline has nothing to do with fundamentals, which is a positive thing. There's no big FUD circulating and it's not a reaction to a ban or an exchange hack. It's just traders fooling around. Nothing to worry about.

[GreatArkansas]

If we will based on technical side.
Using weekly timeframe on current chart of Bitcoin in Bitsamp exchange.
Based on stochastic RSI, it's kinda we need more few days or weeks to see it on oversold area using this kind of RSI. But in the daily timeframe, it's really on the oversold area days already. I'm kinda bearish now especially in higher timeframe, if you see the weekly timeframe's RSI, we still not in the area of oversold.

[Quidat]

slowdown caused by the Coronavirus

I dont think so.

and the refusal of Wilshire Phoenix’s Bitcoin ETF.

This is one somewhat valid.

Im using RSI and MACD and using up some divergence if i do find one.Technicals surely show that its already oversold
but it doesnt guarantee that it wont dip down any further.

[STT]

All I take away is an indicator is not more then a sign, it doesnt have to force anything as true but it helps highlight possible moves and underlying strength maybe.     Even the averages arent always so important, its just something widely noted easily referenced and taken to show some weight to the price from prior moves.

The ETF getting turned down is no surprise so its in the price already I guess, I rate it no effect to note especially.   We're rising above two day average, if we stay above there then I see the weekend as being likely positive and it could help develop us further next week.   Or BTC can do anything it feels like as always :p

[Febo]

Xangle reveals that “Bitcoin is oversold”
https://xangle.io/project/BTC/disclosures/5e572906e603d6cdffd521c6

If World economy will go into recession in upcoming months then all old charts are totally irrelevant and new charts will get painted.

[Reatim]

Bitcoin being oversold few weeks ago look very correct because of the decrease in it price. Although, we can't blame those who involved in the selling of their stash over the months as the price of Bitcoin was seen hit highest this year. Many people with their problems which are or is to be solve, so, by selling their portfolios shouldn't be an issue. We all know how volatile the entire cryptocurrency market looks.

Correction does not mean bitcoin is oversold mate because this happens everytime the price goes up there will be a following corrections and that is normal in this market

And what OP is pointing maybe half truth but as we can see the value is not falling that bad means there is still a strong hold from the investors so we can still find good things this coming event and hopefuly we can feel that before May this year.

[bgaf]

Meanwhile, bitcoin’s recent price volatility is continuously increasing due to global economic slowdown caused by the Coronavirus and the refusal of Wilshire Phoenix’s Bitcoin ETF.

I agree the price hampered with the rejection if the ETF but dont on the part of Coronavurus spreading. This isnt a stock market affected by certain reason such as airlines, hotel, and most business that have soemthing to do with international affiliation. Chinese business were probably affected but for the digital currency, I doubt this can affect much.

[Taskford]

Meanwhile, bitcoin’s recent price volatility is continuously increasing due to global economic slowdown caused by the Coronavirus and the refusal of Wilshire Phoenix’s Bitcoin ETF.

I agree the price hampered with the rejection if the ETF but dont on the part of Coronavurus spreading. This isnt a stock market affected by certain reason such as airlines, hotel, and most business that have soemthing to do with international affiliation. Chinese business were probably affected but for the digital currency, I doubt this can affect much.

Due to what is happening in China, not only the Chinese business is suffering, but also the business of other countries that have their own production capacity in this country.  One could assume that coronavirus has a big impact on the global economy, but many analysts are already talking about a big crisis that causes a negative phenomenon.  But it seems to me that in the next crisis, the cryptocurrency market can, on the contrary, show very good results, since with the help of cryptocurrency many investors will be able to save their assets.

They suffer so much from this virus and provably it can create a huge recession to the price of bitcoins since Chinese are one of the biggest market of crypto and for the dumps we see right now maybe its sort of related into these events and let's hope that this unfortunate virus will gone since if China will fail the whole global economy is at risk.

[buwaytress]

Oh for sure oversold. BitMEX (yes, only for  derivatives I know but a huge reflection nevertheless) I believe at the peak had 95% of trade volume on shorts. Everyone was selling.

The good news for me is even with that avalanche of sell orders, btc barely looks under pressure. 8500 even is not possible for sellers. Looking good.