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    Home » Crypto News » After Two Red Weeks, Bitcoin Is Nearly As Oversold As In March 2020

    After Two Red Weeks, Bitcoin Is Nearly As Oversold As In March 2020

    Author: Felix Mollen

    Last Updated Apr 26, 2021 @ 08:40

    Last week, Bitcoin hodlers celebrated a new ATH. This week they “celebrate” its second largest red candle. Bitcoin hasn’t been this oversold since 2020.

    Bitcoin closed the week with the second-largest red candle in its entire history, testing lows near the $47k price zone following an ATH of $64K recorded in the previous week.

    Overall, this was a tough week for markets across the board. From stocks to cryptocurrencies, traders experienced an episode of collective panic marked by the rumor that Joe Biden would be preparing a bill to increase capital gains taxes by almost 100% for all those generating more than $1 million in profits.

    BTC Registers Its Second-Largest Red Candlestick Ever

    The news caused a widespread drop in the most important financial indices in the United States and other countries. And cryptocurrencies had an even worse reaction, with Bitcoin confirming its downtrend after breaking the support of a channel initiated in late 2020.

    Today’s drop puts Bitcoin at $48,000 with lows of $47044, according to Tradingview data. For the first time, the 10-period moving average and the 55-period moving average are crossing to the downside, which could indicate that the bullish trend is getting weaker, at least temporarily.

    Price of Bitcoin in weekly candlesticks.
    BTCUSD Weekly candlesticks. Image: Tradingview

    Bitcoin lost just over 5% in the last 24 hours, and 13% over the previous 7 days. With near $8.000 lost, this would be the most significant gross price decrease in history, even though it has seen worst declines in terms of price proportions. To put things in context, a $10 drop when Bitcoin was traded at $100 was proportionally worse than a $1000 drop when Bitcoin was priced at $60,000.

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    Bitcoin Has Not Been This Oversold Since The 2020 Panic Episode of the COVID-19 Crisis

    Indicators show that traders have not yet recovered from the panic episode of the previous days. Bitcoin has not been this oversold since mid-March last year, when fears of a widespread crisis due to the coronavirus pandemic drove markets to the subsoil.

    The RSI is an metric that signals whether there is a balance between buyers and sellers. It is currently in the order of 25 points out of 100. That is, there are 25 people placing buy orders vs. 75 people placing sell orders for the same value.

    Price of Bitcoin, daily candlesticks. Image: Tradingview
    BTCUSD with RSI Image: Tradingview

    This could mean that traders are currently looking to exit their positions to increase their holdings of fiat, commodities, or perhaps even altcoins.

    A similar sentiment is shown by the Crypto Fear & Greed Index, which is at its lowest level in a year, indicating that investors’ fear of losing money with Bitcoin hasn’t been this strong since the March 2020 crash.

    Crypto Fear and Greed Index
    Crypto Fear and Greed Index. Image: Alternative.me

    However, a low RSI could be a bullish sign. In theory, markets tend to achieve equilibrium after such periods of euphoria with a correction to the contrary.

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    Tags: Bitcoin (BTC) Price Bitcoin Bear Market
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    About The Author

    Felix Mollen
    More posts by this author

    Felix got into Bitcoin back in 2014, but his interest quickly expanded to everything blockchain-related. He's particularly excited about real-world applications of blockchain technology. Having worked as a professional content writer for three years before that, Felix transitioned to working on blockchain-centered projects and hasn't looked back ever since.

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