When Will the Crypto Bear Market End? | And More in This Weeks Crypto Update.

• Decentraland is at the Most Oversold Levels in History
• Bitcoin on Track for its 8th Consecutive Weekly Loss, Are We Oversold Yet?
• When Will the Crypto Bear Market End?

Decentraland is at the Most Oversold Levels in History

Decentraland’s (MANA) price is at the most oversold level in history. According to the stochastic oscillator, MANA is extremely oversold. After the recent crash, both the short-term MA and long-term MA of the stochastic indicator are at the 0 reading.

Stochastic Oversold Reading

While the stochastic oversold reading may, in fact, signal a reversal and provide us with a rare opportunity, the danger is that MANA’s price can settle inside a consolidation to allow the stochastic indicator to come out of these extreme oversold readings.

The dip below the $1.00 psychological number was short-lived, but we’re not out of the woods just yet.

Most RSI oscillator readings are below the 50-mid level on the daily and weekly chart, signaling bearishness. For a shift in the sentiment, we would need the RSI momentum to break above the 50 mid-level in both time frames.

The last two times the RSI broke below the 50 mid-level, MANA’s price bottomed out, and a “V” shape bottom was put in place. Also, the strong bounce from below $1.00 makes it look like we’re in the process of establishing a new “V” shape bottom.

However, the current weekly RSI reading is the lowest since November 2019, which can stand in the way of a possible reversal.

Looking forward: MANA’s price can settle in a wide range between $1.54 and $0.35.

Bitcoin on Track for its 8th Consecutive Weekly Loss, Are We Oversold Yet?

Bitcoin (BTC) is on track to record losses for the eighth week in a row, the longest streak of losses in history. The previous biggest consecutive weekly losses were recorded in December 2014, when Bitcoin was worth a few hundred $ and was down for five weeks in a row.

Is Bitcoin Oversold?

Despite the severe sell-off, Bitcoin is still not oversold, at least according to the most popular momentum oscillators. Bitcoin’s current weekly RSI reading of 33.67 shows that we aren’t oversold just yet. The RSI oscillator would need to fall below 30 and even 20 to be considered oversold.

On the other hand, the stochastic oscillator has entered oversold readings, but unlike the RSI, it has the tendency to stay in oversold readings longer, as it is more volatile and quick to react.

Bitcoin being oversold in 2014

By comparison, in 2014, after the record weekly losses streak, Bitcoin consolidated for 31 weeks before it resumed back higher.

Bitcoin became oversold when its RSI fell below 30 and the weekly stochastic oscillator entered oversold readings. Following the oversold condition, the price started to consolidate, and the correction continued for another two months, before the price started to recover.

What does oversold mean?

The term oversold is a common one in the technical analysis lexicon, but what does it mean? In short, oversold means that an asset has been sold aggressively, and a lot of traders have taken their positions off the table, which can lead to a temporary pause in the trend.

The oversold condition can be temporary, and it can lead to a bounce when buyers start to step in. However, the oversold condition can continue for a long time. As for the current Bitcoin correction, the oversold condition can lead to a pullback and a pause in the correction. However, the correction is likely to continue in the long-term.

Looking forward: The Bitcoin sell-off can slow down in the near future, and we might see a temporary bottom around the $30,000 considerable round number. However, in the long-term, the correction can extend all the way to $20,000, which is a massive support level since it is the all-time high reached in the 2017 bull run. A fall to $20,000 would also allow the RSI oscillator to reach oversold readings.

When Will the Crypto Bear Market End?

A bear market is when Bitcoin is down 70% from its highest price. Under this definition, Bitcoin has experienced 4 bear markets so far.

Bitcoin (BTC) was launched 13 years ago, but it has already undergone 4 bear markets despite its brief existence. Therefore, we need to look at the bigger picture and analyze the various bear markets to gain an insight into what lies ahead.

We’re now going to break down the last four major Bitcoin bear market cycles and what we can learn from them.

Bitcoin Bear Markets

Since its inception in 2009, Bitcoin saw its price plunging as far as 92% in 2011. In dollar terms, though, the current bear market is the worst, with over $1.4 trillion in market value being wiped out from the cryptocurrency market.

The last 4 major bear markets have the following characteristics:

Bear Market #1: From June 2011 to November 2011, BTC’s price tumbled -by 92%, from an all-time high of $30 to a low of $2.5. The first bear market lasted 53 days.

Bear Market #2: From April 2013 to July 2013, BTC’s price tumbled -by 75%, from an all-time high of $268 to a low of $65. This bear market lasted 87 days.

Bear Market #3: From November 2013 to January 2015, BTC’s price tumbled -by 83%, from an all-time high of $1,149 to a low of $197. This bear market lasted 415 days.

Bear Market #4: From December 2017 to December 2018, BTC’s price tumbled -by 83%, from an all-time high of $19,764 to a low of $3,148. This bear market lasted 365 days.

In summary, Bitcoin’s bear markets tend to last on average 230 days, during which BTC tends to lose on average83% of its value. So the current bear market falls in line with the historical precedent, and it won’t be the last one.

Looking ahead: While bear markets tended to be shorter initially, major bear markets currently come around every four years. The first two long bear markets started in November 2013 and December 2017 and lasted 415 and 365 days, respectively. The current bear market started in November 2017 and fell 55% in 188 days. Therefore we can expect the price to drop for an additional 200 days and about 25%-30% more from the current all-time high.

Different ways to trade in a bear market

While Bitcoin is not the only currency that has experienced a bear market, there are still many ways to trade during a bear market.

DCA or Dollar Cost Averaging. This involves buying a cryptocurrency every month and keeping on buying it continuously. This way, even if the price falls, the more you buy, the lower your average entry price will be. Therefore, you will make even more profits in a bull market. We offer advanced automated DCA tools at Cryptohopper that can work well together with your trading strategies.

Shorting. Shorting is another way one can make money in a bear market. Shorting involves borrowing and selling a coin that you do not own, and making a profit as the coin falls. This can only be done with a margin or futures account and is considerably more risky than DCA. This is because you have the potential to get liquidated and even lose more than 100% of your funds, essentially indebting you to the exchange. While some exchanges offer protections against this, it is still a lot riskier than DCA.

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