Bitcoin (BTC) tumbled to 15-month lows earlier today, dashing hopes of a rally signaled by current extreme oversold conditions. The world’s largest cryptocurrency by market capitalization fell to $3,200 on Bitstamp at 00:15 UTC – the lowest level since September 2017.
BTC was trapped in a five-day-long narrowing price range 24 hours ago and showed signs that it might break upwards with a strong move toward the crucial resistance at $3,633.
These bullish expectations were based largely on a premise that the sellers are facing exhaustion, as indicated by the 14-week relative strength index (RSI), having engineered a 49 percent price drop in the last four weeks. Further, evidence of bargain hunting had emerged earlier this week in the form of a three-day inverted hammer candle. Even so, BTC dived out of the narrowing price range in U.S. trading hours yesterday, killing the prospects of a short-term inverted hammer bullish reversal above $3,633. BTC’s persistent failure to produce a notable price bounce despite extreme oversold conditions indicates that the bearish sentiment is very strong. As a result, a convincing break below the 200-week moving average (MA) support of $3,170 cannot be ruled out. At press time, BTC is changing hands at $3,250 on Bitstamp, representing a 2 percent decline on a 24-hour basis.