What if the price of Bitcoin continues to drop! Here's why it's time to start paying attention

Eliminate the noise and focus on the signal. 5 important BTC price indicators are in multi-year "buy zones".
Newsletter
For bulls, the daily price action of Bitcoin (BTC) leaves a lot to be desired, and at the moment there are few signs of an imminent reversal.

Following the trend of the last six months or more, current factors continue to put pressure on the price of BTC:
Ongoing concerns about potentially tough crypto regulations. US Federal Reserve policy, interest rate hikes and quantitative tightening. Geopolitical concerns related to Russia, Ukraine and the militarization of high-demand natural resources imported by the European Union. Strong feelings of risk aversion due to the possibility of a recession in the United States and around the world.
Combined, these challenges have made high volatility assets less attractive to institutional investors, and the euphoria seen during the 2021 bull market has largely dissipated.

So the day-to-day price action is not encouraging, but looking at longer-duration metrics that gauge Bitcoin's price, investor sentiment, and valuation perceptions show some interesting data points.
The market still flirts with oversold conditions
On the daily and weekly timeframe, the price of BTC is leaning against a long-term descending trend line. At the same time, the Bollinger Bands, a simple momentum indicator that reflects two standard deviations above and below a simple moving average, begin to tighten.

Band tightening usually occurs before a directional move, and price trading at long-term resistance also usually indicates a strong directional move.

Bitcoin's March 28-June 13 selloff sent its Relative Strength Index (RSI) to a multi-year high, and a quick look at the indicator versus price action BTC's longer-term view shows that buying when the RSI is deeply oversold is a profitable strategy.

BTC Weekly Chart Relative Strength Index/ usd. Source: TradingView
Although the near-term situation is dire, an independent view of Bitcoin prices and its market structure...

Crypto Oct 1, 2022 0 38 Add to Reading List

What if the price of Bitcoin continues to drop! Here's why it's time to start paying attention

Eliminate the noise and focus on the signal. 5 important BTC price indicators are in multi-year "buy zones".

So what if Bitcoin price keeps falling! Here is why it's time to start paying attention

Newsletter

For bulls, the daily price action of Bitcoin (BTC) leaves a lot to be desired, and at the moment there are few signs of an imminent reversal.

Following the trend of the last six months or more, current factors continue to put pressure on the price of BTC:

Ongoing concerns about potentially tough crypto regulations. US Federal Reserve policy, interest rate hikes and quantitative tightening. Geopolitical concerns related to Russia, Ukraine and the militarization of high-demand natural resources imported by the European Union. Strong feelings of risk aversion due to the possibility of a recession in the United States and around the world.

Combined, these challenges have made high volatility assets less attractive to institutional investors, and the euphoria seen during the 2021 bull market has largely dissipated.

So the day-to-day price action is not encouraging, but looking at longer-duration metrics that gauge Bitcoin's price, investor sentiment, and valuation perceptions show some interesting data points.

The market still flirts with oversold conditions

On the daily and weekly timeframe, the price of BTC is leaning against a long-term descending trend line. At the same time, the Bollinger Bands, a simple momentum indicator that reflects two standard deviations above and below a simple moving average, begin to tighten.

Band tightening usually occurs before a directional move, and price trading at long-term resistance also usually indicates a strong directional move.

Bitcoin's March 28-June 13 selloff sent its Relative Strength Index (RSI) to a multi-year high, and a quick look at the indicator versus price action BTC's longer-term view shows that buying when the RSI is deeply oversold is a profitable strategy.