Bitcoin's Oversold Levels Spark Bearish Debate Among Analysts

Bitcoin has recently entered oversold levels, a development that has sparked debate among analysts. Crypto analyst Quinten highlighted this shift, but Dr. Cat, another prominent analyst, cautioned that this situation is bearish rather than bullish for the leading cryptocurrency.

Dr. Cat explained that oscillators, which are range-bound indicators, cannot exceed 0 and 100 due to their mathematical limitations. However, Bitcoin's price can continue to move lower or higher despite these constraints. He noted that all of Bitcoin's bull markets have been in overbought territory on the weekly chart, suggesting that oversold conditions on lower timeframes do not necessarily indicate a bullish trend.

Dr. Cat further clarified that buying during an oversold condition on a lower timeframe when Bitcoin's higher timeframe is bullish can be a strategic move. However, he criticized those who advise buying based on a weekly oversold chart, arguing that such advice is misguided. He emphasized that many altcoins are oversold on higher timeframes and can remain so as they approach zero, a trend he believes is inevitable.

In a bull market, oversold conditions on the daily chart may mark higher lows on the weekly or monthly chart. Conversely, in a bear market, oversold conditions may persist or lead to consolidation before further declines. Dr. Cat's analysis aimed to correct the misconception about oversold and overbought Relative Strength Index (RSI) conditions, rather than predicting Bitcoin's market direction.

CryptoQuant CEO Ki Young Ju added to the bearish outlook by revealing that Bitcoin's supply currently exceeds its demand. This imbalance supports the idea that Bitcoin is in oversold conditions, with holders selling their coins rather than buying. Additionally, crypto analyst Ali Martinez noted that whales have been taking profits during the recent Bitcoin rally, offloading over 29,000 BTC since April 9. Ki Young Ju also asserted that Bitcoin's bull market is over, citing significant selling pressure.

At the time of writing, the Bitcoin price is trading at around $84,600, reflecting a decline in the last 24 hours. This price movement aligns with the bearish sentiment expressed by analysts, who warn that oversold conditions do not necessarily signal a bullish reversal for Bitcoin.