Last week, panic gripped the crypto market as Bitcoin fell below support, stablecoins became unpegged from the dollar, and LUNA fell to zero. The bloodbath has left cryptocurrencies, in general, more oversold than the COVID drop on Black Thursday.
Here’s a closer look at cryptocurrency’s historically oversold situations.
For Bitcoin, it was a massacre, and in altcoins, it was apocalyptic. Stablecoins tethered to the value of the almighty dollar were entirely shattered. A villainous actor or group of actors strategically targeted the UST stablecoin’s dollar peg, causing a domino effect of algorithmically driven reserve asset liquidation, which included BTC.
Whole Crypto Market More Oversold Than Black Thursday
Many altcoins saw a drop of 80 to 90 % or more once Bitcoin broke through support. The value of LUNA, a UST asset, has plummeted to nothing. The whole crypto market cap has been reduced by billions of dollars. If there was ever a time to be skeptical of cryptocurrency’s future, it’s now. When things start to look shaky, though, market veterans advise looking at the bigger picture.
The phrase “when in doubt, zoom out” applies in this scenario. The weekly RSI has reached even more extreme oversold levels than Black Thursday.