Bitcoin still in oversold zone: Should we buy Bitcoin?
What does oversold mean? It means that many are selling and the value is trading at a lower price, hence a very good opportunity to buy as a price bounce is imminent soon after, although this may take longer or sooner, no one can be really sure. But that’s why we have indicators!
Last week, the Fear and Greed Index printed 15 (Extreme Fear); a level that was last seen back in July 2021 resurfaced as Bitcoin plunges down just above $40k.
Although right now, Bitcoin confidence is still on the low, we are slowly (and hopefully) recovering on the Fear and Greed Index. Still at Extreme Fear but at least a little bit better.
Most charts are indicating a buy signal for Bitcoin. We are still closer to the oversold territory than overbought. As an example, look at this MVRV Z-Score chart.
The overbought zone starts at around a 7.5 level and we’re currently sitting at 1.3811, same levels back in Sep 2020 and July 2021 — waayyy below the danger zone. Look closely on the charts and see what happens each time it goes that low.
Also, an interesting chart I’ve come across today is the chart for Unique Addresses holding at least 1,000 BTC.
Each time the number of unique bitcoin addresses stabilizes (not moving up or down), guess what’s the next move? Up!
So for now, if you can, hodl! Coz once it moves up, we then prepare to sell.
Stay tuned. 😉
DISCLAIMER: THIS IS NOT FINANCIAL ADVICE.
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Elisa is our Head of Market Analysis at Rocket Crypto X
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