After nearly two weeks of downwards trading cycles, the cryptocurrency markets have found some stability and are now trading sideways. Today’s sideways trading has been a much-needed reprieve for investors and traders alike, who can now focus their energy on determining when the markets will find a bottom and reverse this persisting downwards trend.
Bitcoin May be Oversold, But Further Losses May be Necessary for Reversal
At the time of writing, Bitcoin (BTC) is trading up approximately 2.5% over the past 24-hour trading period at a current price of just over $3,800. Although Bitcoin has had a rough past couple of weeks, it has found some apparent stability at its current price levels and seems to have solidified $3,600 as a support level.
Bitcoin is currently trading about 6% higher than its 2018 lows of $3,600, and 24-hour trading volume has fallen into the $5 billion region from weekly highs of well over $7 billion.
In the short term, one analyst believes that Bitcoin may have already found a temporary bottom due to being oversold, but also noted that a fall to $2,970 in the future may be likely.
Nick Cawley, a markets analyst at Daily FX explained this, citing BTC’s relative strength index (RSI) as evidence that it is currently oversold.
“After dropping in excess of 40% in the last two weeks, with very little news to drive the move, bitcoin is trying to build a base around the $3,500 - $3,700 level in the last three days. While the longer-term chart setup remains negative, with a test of $2,970 likely—in the short-term the charts are showing the cryptocurrency heavily in oversold territory, which may produce a relief bounce higher,” he said.
Altcoins Trade Up, Still Near 2018 Lows
The altcoin markets are once again tied directly to the price movements of Bitcoin, with many major altcoins trading up 2% with charts heavily resembling that of BTC.
At the time of writing, XRP is trading up 2.6% at its current price of $0.36. XRP is down approximately 36% from its one-month-highs of $0.56 but is still sitting 50% above its 2018 low of $0.24.
Ethereum (ETH) is currently trading up 2.74% at its current price of $109.37 and is sitting just 9% off of its 2018 low of just under $100. Many speculate that ETH’s massive 64% decline from three-month highs of $300 to its current price is partially the result of ICOs selling off their ETH holdings in an effort to secure their funding.
Time will tell whether or not the cryptocurrency markets truly are in oversold territory, or if further losses are needed in order for the markets to find a bottom and start a new upwards pricing cycle.