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Highlights
- Bitcoin has dropped below the $62,000 after the Mt. Gox BTC repayment announcement.
- However, crypto analysts believe that it's the "prime" opportunity to buy the dip.
- The most crucial factor considered by renowned analysts is Bitcoin's RSI level touching the oversold territory.
Despite the sluggish price movements of Bitcoin (BTC), technical indicators have stirred interest and optimism among crypto analysts. Several experts highlight compelling reasons why the current market conditions might present a prime opportunity for investors to buy Bitcoin. Here are the top three reasons underpinning their bullish outlook.
1. Oversold RSI Indicating Potential Price Surge
One of the most persuasive arguments for buying Bitcoin now is rooted in the historical performance of the Relative Strength Index (RSI). Crypto analyst Ali Martinez emphasized that Bitcoin’s daily RSI has reached oversold territory only three times in the past two years. Currently, BTC’s RSI stands at 28, indicating an oversold condition.
Moreover, each instance preceded significant price surges of 60%, 63%, and 198%, respectively. In addition, Martinez’s analysis suggests that Bitcoin’s current RSI level, coupled with its price dropping below $62,000, might signal a similar rebound. “With #BTC now below $62,000 and the RSI in oversold territory again, it might be a prime opportunity to buy the dip,” he wrote.
The RSI is a momentum oscillator that measures the speed and change of price movements, typically used to identify overbought or oversold conditions in the market. When the RSI falls below 30, it indicates that the asset is oversold and price bounce could ensue. This historical precedent of price surges following oversold RSI conditions lends strong credibility to the argument that Bitcoin might be poised for another upward trajectory.
Also Read: Crypto Market Crash: Here’s Why Bitcoin, Ethereum, XRP, SHIB Are Falling Today
2. Key Support Levels Holding Firm For Bitcoin
The second reason to consider buying Bitcoin lies in its technical support levels and moving averages. The Wolf of All Streets, another prominent analyst, underscores the importance of the 50-day and 200-day moving averages (MAs) in the Bitcoin price history. He notes that Bitcoin recently revisited range lows around $60,000, a critical support level.
“The 50 MA was breached days ago, and the 200 MA is screaming up below, currently around $57,000,” he explains. Moreover, he highlighted the potential for these levels to act as a strong support zone. For context, moving averages are significant because they smooth out price data over a specific period, helping traders to identify trends and potential reversal points.
Furthermore, the fact that Bitcoin has not fallen below the 200 MA since it was priced at $28,000 indicates a robust support level that could prevent further declines. The analyst also points out that the Bitcoin RSI is touching oversold levels for the first time since August 2023.
This suggests that the market might be nearing a bottom. “Important not to become bearish at key support… yet,” the analyst advised. Hence, it signals that investors should watch these levels closely for buying opportunities.
3. Market Sentiment & Bitcoin Whale Activity
The third factor bolstering the case for buying Bitcoin is the activity and sentiment of large market players, commonly known as whales. According to data from Datamishi, Bitfinex whales have increased their long positions by approximately 2,580 BTC since June 17. This buying offset previous reductions.
Currently, Bitfinex BTC long positions stand at 50,894 BTC. This accumulation indicates confidence among major investors in a forthcoming price rebound. Additionally, Michaël van de Poppe, another well-respected analyst, attributes the recent market correction to news-driven events, such as the impending Mt. Gox repayments.
However, he believes the market’s reaction may be overblown and rooted in fear rather than fundamentals. “This correction is news-driven for #Bitcoin & #Altcoins… Might be the low,” he noted. Moreover, he suggested that the market could stabilize and recover as the fear dissipates.
Also Read: Reasons Why Bitcoin Price Suddenly Dropped Below $61k
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