Crypto Market More Oversold Than Black Thursday


Panic hit the cryptocurrency market last week when bitcoin broke below the support level, separated the stablecoins from the dollar, and LUNA has dropped to zero. The bloody fallout for cryptocurrencies as a whole has left more oversold from the COVID Black Thursday crash.

Here is a closer look at the historical oversold conditions in cryptocurrencies.

Total Crypto Market Selling More Than Black Thursday

It was a bloodbath in bitcoin, the apocalypse in altcoins. Even stablecoins pegged to the mighty dollar were completely shaken. A nefarious actor or group of actors has strategically attacked the UST stablecoin peg to the dollar, causing a domino effect of algorithmically driven liquidation of reserve assets that include BTC.

Related reading | This Expanding Triangle Pattern May Be The Last Hope For The Bitcoin Revolution

Bitcoin fell through the support and many cryptocurrencies reached an overall drop of 80-90% or more. LUNA, an asset linked to UST, fell to zero. Billions of total cryptocurrency market cap has been wiped out. If there is time Doubtful about the future of cryptocurrency, may be now. However, experts in the market recommend minimizing when things get dubious.

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The weekly RSI is more oversold than on Black Thursday | Source: CRYPTOCAP-TOTAL on TradingView.com

“When in doubt, minimize,” applies in this case. Comparing the recent cryptocurrency selloff with Black Thursday, the weekly RSI has reached its most extreme oversold levels. In the meantime, the Black Thursday candle is down 50%, and the latest correction in the contrast has only produced 30%.

by definition, hidden upward divergence Occurs when the price of an asset sets a higher low, but the indicator sets a lower low. This often indicates a continuation of the future.

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Elliott Wave Theory suggest the cycle isn't complete  | Source: CRYPTOCAP-TOTAL on TradingView.com

Could there be another 45% crash in the future?

Elliott Wave Theory It could provide clues as to what it might look like to continue into the future. The total market capitalization of cryptocurrencies is also traded within a parallel channel, which touched the bottom of it. The upper limit of the channel is about 10 trillion US dollars.

Related reading | Bitcoin Bear Market Comparison Says It’s Almost Bull Season

While this fact may be Hope the bulls need nowBears can still laugh at last. The weekly RSI has now reached its lowest level since the bottom of the bear market and the fourth all-time low on TradingView.

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Only three other times has the total crypto market cap been more oversold  | Source: CRYPTOCAP-TOTAL on TradingView.com

Of the three previous lows identified on the weekly RSI, two were the bottom of a bear market. However, the remaining decline was followed by another 45% drop to the final bottom. Another 45% drop from here would bring the total cryptocurrency market cap back to around $600 billion, or below the peak of the January 2018 cycle.

Simply put, the risks are still very high, but as the conditions for excessive selling increase, the potential for reward increases. Act accordingly.

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Featured image from iStockPhoto, Charts from TradingView.com





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