Bitcoin Has Been Oversold for Months. Is a Buy Signal Next?

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Really excited to have you on this week in particular because, as I know you've been watching and plenty of us in the industry have been, crypto's going along slowly, calmly, and and that's not typically it it's MO, especially in a world where yields are rising, AI stocks are continuing to to go through the roof, major indices keep setting record highs. At the same point, we get worrying inflation prints and a lot of different things going on. Crypto is supposed to move. One way or another, but hopefully up, but for the most part, it's staying still. And I think you're the perfect person here

Of course. So, obviously, the crypto winter has been ongoing, and with the downtrend, we now have a long term oversold indication, and that's based on it's measurable. It's based on the monthly stochastic oscillator that we use. So it's a technical indicator, pretty popular in fact, and it's been oversold now for a few months. And that's something that has us sort of perk up, right? We pay attention when oversold conditions return, but they themselves are not enough of an indication of a turnaround. What we like to also see is mostly twofold, I would say, which would be improved momentum. And

Okay. So let's break this down a little bit more using the chart that we just had up, if we can get it again, because there's a lot of information here, a lot of different charts. And I know when you and I have spoken in the past, it's never just one reading, it's never one indication, it's never one particular time horizon or timescale. So could you just maybe walk us through a little more precisely what you're seeing, and I guess what you would need to continue seeing for your conviction to persist or get stronger.

Of course. So you can see this is a weekly bar chart of Bitcoin, and you can see the downtrend, of course, series of lower highs, lower lows. But what you'll also notice is that there is a long term support zone nearby, and support can be measured many different ways. We look at previous peaks and troughs on the chart, so you can see previous troughs or lows have been captured, by this zone. We also like to use Fibonacci retracement levels. It's something that's fairly common in technical analysis as a discipline and it's a way to understand where buyers may step in based on the Fibonacci sequ

Yeah. I'm I'm curious. I know in some of our previous conversations, we we've gone back and and talked about historical precedents. And although crypto is not very old, especially in terms of the world of the financial system, it's gone through many cycles in its brief history. Are there one or two times where you've seen a similar type of oversold situation, and are there any similarities? Typically, what is the catalyst that helps it break out? Is it something exogenous that happen, like outward stimuli, or are there signals in terms of, momentum indicators or volume, something like that, th

Yeah. So what we like to see is is pretty specific, in fact, in terms of an oversold condition giving way to then what we call an oversold buy signal. And in our work, that occurs in part when the stochastics, in this case on the monthly, would turn back above 20% decisively. We feel that that shows enough of a momentum and sentiment shift to then suggest that it was a major