Bitcoin Indicator Hits Historical Low Not Seen Since 2015

Tony "The Bull" Severino

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Bitcoin bulls continue to be demoralized, as the price per coin grinds continuously at lows for what feels like an infinite amount of time. However, a bottom could be forming, according to an indicator that has reached historical lows not seen since the 2015 bear market bottom.

What followed the last signal, was 10,000% returns and Bitcoin became forever became a household name. While such returns aren’t likely a second time, such oversold conditions could yield some significant, unexpected upside. Here is a closer look at the 3-day Stochastic on BTCUSD price charts.

The Stochastic Oscillator Explained

The Stochastic oscillator is a a range-bound momentum indicator that uses support and resistance levels, created by investment educator George Lane in the 1950s. According to Wikipedia, “The term stochastic refers to the point of a current price in relation to its price range over a period of time. This method attempts to predict price turning points by comparing the closing price of a security to its price range.”

The formula provides an asset’s price expressed as a percentage of its price range between 0% and 100%. The goal of the Stochastic – often called Stoch for short – is to spot when prices close near the extremes of a recent range. It is at this point where reversals are most likely to occur. Simply put, the lower the reading, the more oversold and the more likely a bounce is due. The higher the reading, the higher the likelihood of a rejection due to overbought conditions.

BTCUSD saw 10,000%+ ROI following the low | Source: BTCUSD on TradingView.com

Bitcoin Bulls Attempt To Put In A Bottom

Currently, Bitcoin price on 3-day timeframes is at the lowest point in its entire history. The only other time as low, was at the 2015 bear market bottom. A second-bottom followed in the months after, followed by price appreciation upwards of 10,000%. From a low of under $200 per BTC, the top cryptocurrency skyrocketed to nearly $20,000. Crypto was put on the map forever after – what happens this time?

For now, bulls aren’t out of the woods. The Stochastic oscillator consists of a fast stochastic (%K) and a slow stochastic (%D). A signal to take action is triggered when these two lines cross. Bears are in the process of defending a 3-day bull cross, while bulls seek to put in a bottom once and for all.

The bullish crossover hasn't yet been completed | Source: BTCUSD on TradingView.com

Both the Stochastic and RSI are used to signal overbought and oversold conditions. The two tools differ in that the RSI measures price velocity, while Stoch relies on the percentage of a trading range formula. According to Investopedia, Stochastic is more effective for a sideways market – exactly what crypto traders are painfully experiencing now.

During highly volatile conditions, the Stoch can generate false signals. However, it is hard to ignore a historically oversold signal in Bitcoin for only the second time ever, when the previous precedent provided such profitable results. What will this signal produce this time around?

https://twitter.com/tonyspilotroBTC/status/1521572798262566913

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.