After plunging to $6,800 on Friday, Bitcoin (BTC) has been subject to some reprieve; the cryptocurrency now trades at $7,300, up some 8-odd percent from the bottom. While this bounce is somewhat positive for bulls, especially considering the historical importance of the high-$6,000s, a key indicator suggests that there may be more pain to come for the market.<\/p>\n
Analyst Byzantine General recently noted that the Relative Strength Index (RSI) \u2014 an oscillating indicator that tracks if an asset is overbought, oversold, or somewhere in between by factoring in the “magnitude of recent price changes” \u2014 for the one-day Bitcoin chart has hit 25, meaning slightly oversold.<\/p>\n
The significance of this: Bitcoin’s one-day RSI rarely drops below 30, and normally hits 20 when it does. With this precedent in place, there is a high likelihood that BTC will continue to head lower from current price levels.<\/p>\n
https:\/\/twitter.com\/ByzGeneral\/status\/17559040<\/p>\n
While Byzantine’s analysis of the RSI indicator suggests there is more pain to come, there is a confluence of evidence supporting the idea that Bitcoin found a local, and maybe ultimate, bottom in and around $6,700.<\/p>\n
Firstly, as reported by NewsBTC previously<\/a>, Scott \u201cThe Wolf of All Streets\u201d Melker<\/a> noted that during yesterday\u2019s plunge to $6,800, BTC\u2019s four-hour RSI hit 6.5, which is the lowest ever on Coinbase\u2019s market and the lowest it has been in 2019. As the RSI oscillates between 0 and 100, a reading of 6.5, which is extremely rare, implies that the asset being analyzed is extremely oversold, and due to bounce as a result.<\/p>\n 4 Hour RSI is presently 6.5, which matches the lowest that it has EVER BEEN on Coinbase and the lowest it has been this year. Buying some Bitcoin. pic.twitter.com\/1DceRyuBsC<\/a><\/p>\n — The Wolf Of All Streets (@scottmelker) November 22, 2019<\/a><\/p><\/blockquote>\n\n