Bitcoin takes an overnight bruising, but rolls with the punches and comes off the ropes fighting
The Digital Commonwealth daily brief…
THE cryptocurrency markets looked close to being in danger of a serious pullback last night as the warning signal over Bitcoin’s ‘Relative Strength Index’ (RSI) came into play.
The RSI often indicates when a digital asset is becoming overstretched or even undervalued. If the number reaches or goes higher than 70 it indicates a price correction could be imminent. 30 or under shows a cryptocurrency may be oversold.
Yesterday morning, Bitcoin’s RSI was at 68 and edging closer to 70 as it fought to cling on to support at $43,100.
Overnight, however, 70 was breached and the markets snapped into a withdrawal that saw BTC drop to $42,140 with a line of descent that had all the signs of a deep correction.
Traders were relieved to find that support around $42,100 was robust, allowing the flagship crypto and the wider cryptocurrency market to bounce off it.
This morning’s price sees Bitcoin at $42,950 with yesterday’s trailblazers Ethereum and Cardano at $2,376 and $0.62 respectively. ETH was within a hair’s breadth of $2,450 just 24 hours earlier, with Cardano (ADA) breaching $0.68 and inching towards the yearly high of $0.70 it achieved only two weeks ago.
Things look to be stabilising and as the dust settles around the markets, but the direction of travel will be dictated by the mood of the market mid-afternoon.
In the Markets
Total crypto market cap
🔻 $1.71 trillion
🔻2.2%
What Bitcoin did yesterday
🔺 Daily high $43,830
🔻 Daily low $42,328
Bitcoin market capitalisation
🟠 BTC $852.528 billion
🟡 Gold $13.863 trillion
Fear and Greed Index
Bitcoin’s market dominance
43%
Relative Strength Index (RSI)
54
Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price, while 30 or below indicates an oversold or undervalued condition.
Post Script…
Cautionary Notes
It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. The Digital Commonwealth always advises you to obtain your own independent financial advice before investing or trading in cryptocurrency.