Bitcoin - Chance of A Bounce?

٢١ نوفمبر ٢٠١٨

Just some extremely simple long-term probability + pattern theory here.

10 times in Bitcoin's history the RSI has dropped below 25 (on the 14-period Daily setting), and 7 of those times that has been followed by a significant recovery.

Granted it is not a large sample size of occurrences to work with, and this over-sold condition is worse than the others, and past performance is not indicative of future results. But Bitcoin is still a young asset class and respects technical patterns well. Could this be the brutal beginnings of the next bull leg, or is it just the brutal beginning of capitulation? Personally I believe things will get worse before they can get better, but I am not one to ignore 70% odds - even with only a sample size of 10.

One thing is for certain: I would not be shorting at these prices. The short fun is over in terms of risk vs reward, although the critics would say zero is still a long way away (and they're not wrong).

The rest of the year should be very interesting for crypto traders, that's for sure!