Key Points
- Bitcoin’s oversold condition does not guarantee an immediate price bounce, despite the defense of the $50k support zone.
- The crypto Fear and Greed index currently shows fear in the market, potentially presenting a buying opportunity.
Bitcoin’s current oversold and imbalanced condition does not necessarily mean an immediate price bounce is in the cards.
While the $50k support zone is being defended, and some stabilization could persuade investors to bid, the risky conditions are still in play.
Crypto Market in Disarray
At a moment when the price of Bitcoin [BTC] was just above the $60k level, the crypto market found itself in a state of disarray.
The $49k low has been set, and further losses could transpire during the New York trading session, causing panic among participants.
The crypto Fear and Greed index was at 31, indicating fear in the market. This could potentially present a good buying opportunity.
Altcoin Market Capitalization Drops
Since the 29th of July, the altcoin market capitalization has dropped by $163 billion, or 28%.
This measures the top 125 altcoins excluding Ethereum [ETH] and, of course, Bitcoin.
These two giants haven’t fared well either, losing 37.85% and 30% respectively at their lowest.
The index currently shows “fear” with a reading of 26, a condition that has not been the norm for crypto in 2024.
The most recent instance was the 13th of July when the index fell to 25. Bitcoin’s price was at $57.8k then and bounced to $68.8k just two weeks later.
If history repeats itself, Bitcoin might hold on to the $50k support and climb higher.
The daily RSI was at 23, reflecting oversold conditions. The cumulative liquidation levels delta on the chart above was increasingly favoring the short positions.
This imbalance can be wiped out by a sharp price bounce. However, with sentiment as it is and fear ruling the market, strong buying pressure might not arrive for another 24-48 hours.
If it does, the $53.9k and $55.7k levels would be the short-term resistances to watch.
