Bitcoin (BTC) increased its losses on December 29 with a further slide that brought the BTC / USD pair briefly below $ 46,600.
RSI shows “oversold” levels
Data from Cointelegraph Markets Pro and TradingView showed that the pair gave ground ahead of the Wall Street open to exacerbate its 48-hour correction to 10.4%.
The most recent move in a familiar pattern of behavior, the market showed that the range that Bitcoin has spent December in is still very much at stake.
As market participants resigned themselves to a lackluster end of the year, the popular trader and analyst Scott melker noted a possible buying opportunity at the current levels of the shorter time frames.
Bitcoin’s Relative Strength Index (RSI), in addition to other bullish signals, had entered “oversold” territory during the dip in what is a classic buy trigger.
“If you are trading short time frames, there is a very solid risk / reward of going long here”, wrote in one of several tweets about the opportunity.
“RSI Oversold, Hourly Diverging Bullish, EQ Range, Low-Conviction Sell with Minimal Volume.”
Beautiful bullish divergence with oversold RSI on the hourly chart. Small time frame, so I look for the div to build to higher time frames. The 4-hour would be next.
As I said, great potential R / R for a trade here back to the 50Ks. pic.twitter.com/a6T0sPCG6X
– The Wolf Of All Streets (@scottmelker) December 29, 2021
Nice bullish divergence with the RSI oversold on the hourly chart. Short time frame, so I am looking for the divergence to build on longer time frames. The 4 hour one would be next.
Like I said, great risk / reward potential for a trade here back at $ 50,000.
Subsequently, the BTC / USD pair bounced from the lows to break above the $ 47,000 mark again.
Melker had previously defended the pullback from $ 52,000, arguing that “nothing had changed” overall for Bitcoin in range.
The Panic Sell “Hasn’t Happened Yet”
However, not everyone was so optimistic.
Peter Brandt, the veteran trader who earlier in the week had warned of “false breakouts” in illiquid markets during the holidays, now he saw that there was room to go further down.
Still yet to happen … https://t.co/o4I4KuVMNf
– Peter Brandt (@PeterLBrandt) December 29, 2021
It hasn’t happened yet …
The appearance of a phase of “capitulation by panic” worse than the one in early December is, however, a matter of debate.
Retail investors, according to others, were probably not prone to bulk selling at current levels, pointing to the rise of wallets with small balances and evidence of strong hodl behavior throughout the year.
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