Bitcoin is currently trading right around the $47k valuation. The largest digital currency by market capitalization dipped below $50k despite rising above the key level just a few days ago. However, the bulls couldn’t sustain the rise and we are back in sub $50k levels. But, one trader believes that this was a panic sell from some investors and it is now hopefully over.
Bitcoin spent most of the yesterday hovering around the $47.5k level. The only exception was a short-term dip below $47k that lasted for a few hours. Before long, the cryptocurrency was back above $47k. At press time, it is trading at $47.6k.
Bitcoin’s Relative Strength Index (RSI), an indicator of its short-term health is now flashing green through oversold conditions. According to trading expert and analyst Scott Melker, the cryptocurrency has a great potential for an uptick after what he describes as a panic sell-off.
4-hour RSI is oversold.
RSI always makes the trip from oversold to overbought and back, giving us solid signals that local tops and bottoms are close.
I will be watching, once again, for oversold bullish divergence to form here.
If I see that, back to the 50ks. pic.twitter.com/zS9k4eOUtR
— The Wolf Of All Streets (@scottmelker) December 29, 2021
Bitcoin’s recent price drop is being described as a sell-off that was triggered by some Fear, Uncertainty and Doubt (FUD) around the market. While analysts like Melker believe that this sell-off is over, other experts paint a more grim picture. Peter Brandt, who predicted several price dips much more accurately has stated just a few days ago that we haven’t seen a sell-off yet. Brandt referred that tweet and posted:
Still yet to happen … https://t.co/o4I4KuVMNf
— Peter Brandt (@PeterLBrandt) December 29, 2021
According to Brandt, a sell-off is when the price of the crypto experiences a massive price dump accompanied by high volume and speed. It is true that we haven’t seen such a massive move in the last 2 months. While Bitcoin has tanked from around $69k to as low as $45k during this time, most of the moves below have been steady and achieved over time. So, the sell-off perspective really hasn’t happened here yet. But, that doesn’t mean that the crypto can’t post a price increase. A sell-off isn’t the only trigger following which the cryptocurrency can post a price increase. The price drop from recent all-time highs is considerable and with the right indicators, the market can catch on strong enough.
Image Source: Flickr.com
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