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  • Writer's pictureTLivingstonBlog

Bitcoin Reaching Oversold Levels

Since selling my entire Bitcoin position in late April, I have been closely monitoring it and other cryptocurrencies. Even though I'm still very bullish on Bitcoin long-term, I personally do not like to sit through large 30% corrections. While they look like nothing in hindsight, they can be vicious and devastating experiences for those who try to "hodl" through. For me, when I see trouble ahead, I exit. If conditions improve, it's no big deal. I can always get back in.

Now, the question becomes has Bitcoin bottomed? Is it time to reenter? While no one can ever know for sure, I opened a partial position in Bitcoin today for a few reasons. First, it is oversold on RSI on the daily chart. This is a powerful signal that does not occur often during a strong uptrend. Second, there was a heavy volume hammer candle yesterday. This may have knocked out many traders who panicked as Bitcoin traded below the $35,000 level. Shakeouts like this often happen prior to large moves higher. Finally, I like the fact that Bitcoin has retaken its' 200-day moving average which I consider the "line in the sand" for uptrends.

Looking at Bitcoin's chart in 2017 it exhibited very strong action after hammering off the 40-week. Hopefully, history will repeat itself and Bitcoin will have a major run in 2021 just like it did four years prior. After placing my purchase today, I entered a stop loss below yesterday's low to limit my risk. I will add to my position if Bitcoin continues to show strength.

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To get two free stocks valued at up to $1,500, click this link to join Webull. Full Disclosure: This post contains an affiliate link to Gemini and an affiliate link to Webull. Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this post constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog or the associated Twitter and Instagram feeds. The stock or stocks presented are not to be considered a recommendation to buy any stock or stocks. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.

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