Bitcoin dips below $47K but one trader is eyeing ‘solid risk/reward’ for longing BTC now

Bitcoin dips below $47K but one trader is eyeing ‘solid risk/reward’ for longing BTC now

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Short-term profit opportunities are there, but so are concerns over a “panic” sell-off still absent from BTC price charts.

Bitcoin (BTC) added to its losses on Dec. 29 with a fresh tumble briefly taking BTC/USD below $46,600.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

RSI flashes “oversold”

Data from Cointelegraph Markets Pro and TradingView showed the pair giving up ground prior to the Wall St. open to increase its 48-hour correction to 10.4%.

The latest move in a familiar pattern of behaviour, the market showed that the range in which Bitcoin has acted in December remains very much in play. 

As market participants resigned themselves to a lacklustre end to the year, popular trader and analyst Scott Melker noticed a possible buying opportunity at current levels on short timeframes.

Bitcoin’s relative strength index (RSI), in addition to other bullish signals, had entered “oversold” territory during the dip in what is a classic buy-in trigger.

“If you are trading small time frames, there’s very solid risk/reward of punting longs here,” he wrote in one of several tweets about the opportunity.

“RSI oversold, hourly about to make a bull div, at the range EQ, low conviction selling on minimal volume.”

$BTC

4-hour RSI is oversold.

RSI always makes the trip from oversold to overbought and back, giving us solid signals that local tops and bottoms are close.

I will be watching, once again, for oversold bullish divergence to form here.

If I see that, back to the 50ks. pic.twitter.com/zS9k4eOUtR

— The Wolf Of All Streets (@scottmelker) December 29, 2021

BTC/USD subsequently bounced from the lows to return above $47,000.

Melker had previously defended the retracement from $52,000, arguing that “nothing had changed” overall for rangebound Bitcoin.

Brandt: Panic sell-off “still yet to happen”

Not everyone, however, was optimistic.

Peter Brandt, the veteran trader who earlier in the week had warned of “fake breakouts” in thin-liquidity markets over the holidays, now eyed the room for further downside.

Still yet to happen … https://t.co/o4I4KuVMNf

— Peter Brandt (@PeterLBrandt) December 29, 2021

A phase of “panic capitulation” worse than early December appearing is nonetheless a topic of debate.

Retail investors, others argued, were likely not prone to mass selling at current levels, pointing to increases in small-balance wallets and evidence of stronghold behaviour throughout the year.

Source: Cointelegraph

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