Hope for Bitcoin despite being at its most oversold in 2 years

Bitcoin (BTC/USD) dropped to $34,000 over the weekend with a growing correlation to the US stock market. As the Federal Reserve’s policy rapidly changes in response to rising inflation, both conventional and crypto markets seem petrified.

Flagship crypto at its lowest RSI since March 2020

The last time Bitcoin’s daily RSI (Relative Strength Indicator) was so low was in March 2020, the time of the COVID crash. The weekly RSI of 37 shows the asset is oversold.

Great buying opportunity?

According to Marcus Sotiriou, analyst at UK-based digital asset broker GlobalBlock, every bear market bottom for Bitcoin has ranged between 29-35 on the weekly RSI. This shows it’s time to buy for all those who believe in the long-term value of this asset class.

The MVRV ratio is currently at 1.50, showing 50% unrealised profits for Bitcoin wallets. Historically speaking, a ratio below 1 has signaled an end to the bear market, providing excellent buying opportunities.

Marcus Sotiriou commented:

Alex Axelrod, Founder and CEO of Aximetria, hopes for stability for Bitcoin despite market fears. He commented:

El Salvador leading the way again

On Friday, El Salvador bought Bitcoin for $15 million. The country has onboarded 4 million users for its government-backed Bitcoin wallet in just several months, which is almost two-thirds of its population. Considering less than a third have bank accounts, this is quite an achievement.

Sotiriou concludes that El Salvador’s impressive adoption rate will bring other countries to make Bitcoin legal tender in 2022 despite its current volatility.