Bitcoin in heavily oversold territory, analyst says
The bitcoin massacre took a pause Tuesday, with the best-known digital currency trading higher.
In Tuesday trading, a single bitcoin BTCUSD, +10.37% was last changing hands at $3,759.63, up 2.2% since Monday’s level at 5 p.m. Eastern Time on the Kraken crypto exchange.
After a dire stretch for bitcoin, one chart observer said signs point to a potential bottom around current levels. “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,” wrote Nick Cawley, markets analyst at Daily FX.
“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 added, citing the relative strength index (RSI).
The RSI is a technical indicator that measures the magnitude of recent price movements to assess whether an asset is oversold or overbought.
Altcoins, the group of coins other than bitcoin, have erased early morning losses and are trading higher. Ether ETHUSD, +8.91% was up 1.7% at $106.04, Litecoin LTCUSD, +11.79% was up 3.7% at $30.02, XRP XRPUSD, +7.67% the coin that runs on the Ripple protocol, was up 0.2% at 34 cents and Bitcoin Cash BCHUSD, +7.26% was trading at $173.50, up 2.4%.
After tumbling more than 10% on Monday, futures markets finished Tuesday in the green. The Cboe Global Markets December contract XBTZ8, +12.35% ended the day up 1.1% at $3,685 and the CME Group November contract BTCX8, +11.56% finished up 3.2% at $3,720.