Lack of momentum, deeply oversold conditions, and the independence of Bitcoin Cash (BTC) from Bitcoin are some of the reasons that some experts believe that the bear run is falsified. Simply putting it, the notion is that the bear cycle is just a temporary situation that enables investors to buy more Cryptocurrencies ahead of a market rally. Here are the justifications for the assertion.
Lack Of Momentum
On October 14th, Bitcoin Cash crash was dramatic as the price plunged after breaching the $6,000 level of support before retracting to $5,450 in record time. Interestingly, it fell below its 2018 trough of $5,770. The most recent data shows that BTC has fallen to its lowest levels since 2017 as it is trading at $4,977 as at 19:45 UTC, the lowest level record level in 2018.
Notably, in both circumstances, the price usually slumps slowly before retracting to levels near the psychological support. This means that the current crash is a normal phenomenon and retraction is in the offing.
Deeply Oversold Conditions
The deeply oversold condition can be measured by the Relative Strength Index (RSI). It measures momentum oscillation for speed and change of price movements. RSI ranges between 0 and 100 where over 70 indicates an overbuying while below 30 showcases an overselling. Further, an RSI rarely lasts for more than 5 days.
BTC RSI has been at 16 from November 14th meaning that Bitcoin Cash is oversold. This means that there has been a massive sell-off for so long begging the question: Which investors are actually selling BTC after such a long period? In a normal condition, there should be some bulls to take advantage of the oversupply of BTC but that is not yet happening.
Why Is BTC Linked To BCH Hard Fork Chaos?
There is currently two BCH Tokens after the hard fork-BCH SV (Santoshi Version) and BCH ABC. The hash wars have nothing to do with Bitcoin Cash since a similar hard fork in August 2017 created a separate Blockchain platform of Bitcoin. Therefore, it can be deduced that BTC is just a victim of hash wars like any other Cryptocurrency and once the situation calms down, the market will rebind led by BTC.
Has The BTC-ETF Approval Postponement Affected The Price?
Some experts argue that the postponement of the US SEC to grant BTC ETF approval may have contributed to the current bear cycles. However, the effect from the Jay Clayton-led federal agency should have been felt immediately on the end of October 2018. Secondly, Amun AG has been authorized in Switzerland to offer Cryptocurrency ETF with BTC as the dominant part of the index. This development dispels the notion of an ETF-linked crash.
Time To Buy Or Sell BTC?
For prospective investors, it is advisable to monitor price movements for any prolonged gained in timeframes of about an hour, as that would indicate a point of inflection and the bottom of a bear cycle. However, risk-averse investors can also take advantage and sell off BTC for stable coins such as USDT to cushion themselves from losses in the short-term in case of a prolonged slump.