Bitcoin normalises its oversold position; resistance levels may be compelling to the shorts



Over the weekend, bitcoin (BTCUSD) hit a low of $17,585.31, breaking the psychological $20,000 (20K) level. The swing that culminated in this low started on 11 June and resulted in a 40% decline over eight days. Therefore, it is unsurprising that the cryptocurrency's daily RSI registered an oversold reading (blue rectangle).

Currently, BTCUSD is trading above the critical 20K level as its RSI normalised. However, the primary trend's momentum suggests any bounces are likely to be targeted by shorts.


Bitcoin's weekly stochastic is below 20 (green square). This position is suggestive of solid momentum to the downside. The cryptocurrency will be under selling pressure as long as this position maintains. Therefore, rallies on lower times frames become exceptionally compelling to shorts.

Moreover, trying to pick bitcoin's bottom when its primary trend's momentum is biased to the downside is extremely dangerous and, in all likelihood, will contribute to a cryptocurrency panic selling stage.

Start Trading Bitcoin with Confidence

Get a free practice account today.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

${} / ${getInstrumentData.ticker} /

Exchange: ${}

${} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.