Bitcoin Is More Oversold Than It Was At ATH In April, Says Analyst
August 02 2021 - 1:00PM
NEWSBTC
Bitcoin has continued to show tremendous gains lately in the
market. The weekend saw the price of the digital asset shooting up
above $42,000 for the first time in over a month, seeing continuous
green daily closes for nine days straight for the first time in ten
years. Following this has been a number of speculations on why this
is happening. And more importantly, how this trend is most likely
to end. The indicators continue to point towards bullish but with
the price fluctuations that bitcoin is notorious for, there is no
telling how exactly the current uptrend will end. Related Reading
| 8 Green Candles: Here’s What Happened The Last Time In
Bitcoin Talking on this was Matt Maley, a chief market strategist
at Miller Tabak & Co., who was on MarketWatch’s call of the
day. Maley explained his reasoning behind what he believes was
needed for the current gains in the market to stick as prices
rally. Don’t Get Too Excited Maley started out with some advice for
investors, who he tells to gauge the action of the prices during
the normal market hours. Alluding to the fact that the recent
bitcoin price rallies have been happening during off-market hours,
which are weekends, nights, and early mornings. He attributes this
advice to the markets being much thinner, with lower volumes,
during off-market hours. Thus, it is imperative that the movement
of the digital asset be observed during normal trading hours to see
how the price moves. Related Reading | Fast Money’s Brian
Kelly Remains Bullish On Bitcoin, Here’s Why Maley warned to not
get too excited about the recent price increases. Waiting to see
what the market does continues to be Maley’s advice to clients with
regards to the weekend price rallies that have been experienced in
the market. “The markets are much ‘thinner’…and the volumes are
much lower…on the weekends,” Maley said. “So we’ll want to see [if]
bitcoin can remain above $40k once we get into next week before we
get too excited.” BTC price dips following weekend rally | Source:
BTCUSD on TradingView.com Maley continues to want to wait to see
how the price holds up this week before anything else. His target
is now the 200-daily moving average (DMA), and that stands at
$44,600. Opining that the DMA had gotten close to that level since
the rise and falls since May, twice. But had rolled over both times
before hitting it. “Therefore, it could/should provide some
resistance upon any further rally in early August,” said Maley.
Bitcoin Is Oversold Maley pointed out that the digital asset now
looks overbought on the current short-term basis. This is based on
the Relative Strength Index of the asset, an oscillating indicator
used to track the magnitude of recent losses in relation to recent
gains. Related Reading | Bitcoin To Reach New All-Time Highs,
Market Strategist Talking about bitcoin being oversold, Maley said,
“Don’t get us wrong, it got much more overbought before it rolled
over in January and February … and in November of last year.”
Continuing on, Maley added, “However, it is more overbought than it
was at the all-time high in April, so investors and traders alike
will have a lot more confidence if this weekend’s move holds into
the middle of next week.” The price of bitcoin has continued to
show strong bullish indicators following the recent dip in the
price. But if Maley is correct in his analysis and bitcoin is
overbought, then the market might continue to see further dips in
the price of the digital asset. Related Reading | Why Another
Wave Up For Altcoins Is Probable According To BTC Dominance This
could push the price of bitcoin down past $35,000 as the price
finds a comfortable correction point following the rally. As of the
time of this writing, bitcoin is currently trending up slowly
following the dip in the early hours of Monday, trading at $39,443
according to TradingView.com. Featured image from CoinDesk, chart
from TradingView.com
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