As Olga Kharif at Bloomberg reported, the Williams Percent Range (WPR) of Bitcoin is hovering at around -83 percent. In WPR, -80 to -100 percent is considered oversold and -0 to -20 percent is oversold.
Analysts state that the oversold condition of Bitcoin demonstrated by WPR could lead to a short-term corrective rally in the future, which may enable Bitcoin to break out of a major resistance level at $6,900.
Since February, Bitcoin has continued to bounce off of the $6,000 mark, achieving a new monthly high the subsequent month only to fall back to $6,000 to stabilize. A same trend has been demonstrated by the market in the past two weeks, suggesting that a corrective rally is due.
Bitcoin is Stabilizing
In August, Bitcoin recorded its most stable month since June of last year, remaining in the $6,000 to $6,500 pocket. Fast forward a month, as of September 15, the price of Bitcoin remains at around $6,550.
For an asset to achieve a proper mid-term rally after a 80 percent correction, a stabilization period and bottoming out process is required. In late August, BTC surged by more than 17 percent within a two-week period.
Since Sept. 9, BTC has been climbing gradually from $6,100, despite an influx of positive developments in the cryptocurrency sector including Citigroup, Morgan Stanley, and Goldman Sachs doubling down on their efforts to institutionalize Bitcoin through the launch of crypto custodian solutions.
In the past three corrective rallies, BTC was left vulnerable to 20 to 40 percent falls due to its tendency to initiate large-scale corrective rallies in a short period of time. In April for instance, BTC increased from mid-$6,000 to $10,000 within a three-week period, which ultimately led BTC to record a 50 percent drop the subsequent month, in May.
Stabilization of Bitcoin is important to ensure that the asset is ready to initiate a proper rally by the end of 2018, a period in which experts expect to see a wave of new capital to hit the cryptocurrency market fueled by the entrance of institutional investors…