BTC corrects quickly, RSI indicates coin is oversold

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Bitcoin

Analysts are talking about a big price drop in Bitcoin that happened over the weekend.

 

After moving steadily up toward the $60,000 mark, Bitcoin experienced a 15% price drop overnight, before recalibrating to around $55,000 at press time.

 

Looking at this sudden correction, Damanick Dantes at Coindesk compared it to a similar price drop in March, from which Bitcoin recovered handily, and cited that an RSI oversold indicator, which applies now, was part of past recovery activity April 8 and March 25.

 

Dantes noted Bitcoin trading above the 200-day moving average, but cited support levels of $50,000 and $42,000 if the coin value ends up going lower.

 

According to Omkar Godbole (also at Coindesk), who has been analyzing Bitcoin prices for quite a while, one key indicator is the 50-day simple moving average. If Bitcoin starts closing under that mark, Godbole suggests, there’s a bigger decline in store, although sourcing for the story maintains that BTC can withstand some of these pressures.

 

“We believe the pullback is counter-trend, rather than the start of a bearish reversal because it follows a confirmed breakout to new highs,” Katie Stockton, technical analyst and managing partner of Fairlead Strategies, reportedly told CoinDesk in an email.

 

With so much positive analysis for Bitcoin for the long haul, many traders are looking to buy on the dip. With that in mind, if you see Bitcoin move down toward the price support levels indicated, especially the lower one, it may be time to stock up. As always – don’t skip your due diligence! Indicators are great, but there’s no substitute for your own homework on whatever you are due to invest in. Remember, BTC can be volatile! With that in mind, new institutional moves and activity by BTC “whales” supports higher values in the future, and it has become easier to buy micro-pieces of BTC, and to move in and out of the market, if that helps.

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