There is a lot of fear and doubt in the market currently; most of it is because of the media. From the look of things, the whales are after your Bitcoin. The institutions are utilizing the media to push you towards panic selling; it is a business strategy that is part of the market manipulation.
Bitcoin is currently down by nearly 40% from the previous all-time high; the price of Bitcoin is currently under forty thousand dollars. A dip of 40% is a very scary move for Bitcoin, so it is very understandable why new investors are worried. It is very serious when someone has a 40% dip in their investments; if you bought Bitcoin at the peak and are still hodling in this scary situation, you must be very strong. A 40% drop in investment can shake any investor.
Although, back in 2017, we experienced massive drops like this; we experienced massive drops but in a wider bull cycle. The major thing which we should be worried about is that Bitcoin is currently on the 200-day moving average. The 200-day moving average is the bull market line, and when Bitcoin begins to close under that line, we can officially begin to panic. Unless we get a quick recovery if we eventually close under the 200-day moving average, the daily candle has not closed.
Bitcoin closing under the 200-day moving average could start a wider bear trend, and we could start to wonder how bad the bear trend may be. On the bright side, we have not closed under the 200-day moving average; this is a critical point for Bitcoin. It is left for us to hope that we will see the price of Bitcoin closing above the 200-day moving average.
The RSI is currently down to 25; that is the lowest reading on the RSI on the daily charts. The last time the RSI went this low was in March 2020, during the major sell-off because of the Covid-19 pandemic. Before that, there were also major sell-offs back in September and November 2019, when we got lower readings on the RSI.
It is quite rare when we see an oversold reading on the RSI; it is an extreme market event. One good thing that we can derive from crypto history is that every time after these massively oversold readings, the price has rebounded significantly. It is a temporary relief rally in some cases, but in a few situations, it was a major market turnaround like the one that occurred in March 2020.
The price and the RSI may still go lower; we only have to wait and observe what may happen next; if we stay above the 200-day moving average. In all honesty, regardless of the panic and all that is going on, these oversold readings tend to be really good buying opportunities. If the market continues to crash, you could get better buying opportunities, and most people hodling at this moment are experienced traders and investors.
