Cryptocurrency analyst Kevin Svenson is saying that further downside risk for Bitcoin (BTC) is now minimal.
Svenson tells his 78,700 YouTube subscribers that Bitcoin has likely bottomed out after hitting a five-month low of $53,563 last week.
“So I think that we probably found the low. And we’re likely going to bounce from here and start some kind of sideways recovery and then eventually breaking into a new all-time high. It could take months for us to fully complete that but I think it’s quite clear that the bulls have the momentum in the long term.”
Bitcoin is trading at $58,520 at time of writing.
According to Svenson, Bitcoin is showing bullish divergence on the daily time frame on two momentum oscillator indicators – the Relative Strength Index (RSI) and the Moving Average Convergence/Divergence (MACD). A bullish divergence, which suggests a potential reversal to the upside, occurs when the price of an asset records lower lows while the indicators are witnessing higher lows.
“That is bullish divergence on two major indicators. And this is coming in right as fear is at its highest level. It’s always funny how that plays out – we get our bullish signals right when people start giving up.”
The cryptocurrency analyst also says that the daily RSI is suggesting that Bitcoin is currently in oversold territory, another potential bullish signal.
“Every time the RSI reaches this oversold level on the daily we don’t spend too much time there… every time we hit that oversold level on the daily it takes… sometimes it’s a month, sometimes it’s multiple months… but usually that leads into some kind of breakout… the point is when you reach the oversold level you’re usually at or near the bottom.”
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