Bitcoin price drops below $ 47,000, but trader sees “strong risk / reward ratio” long right now

Bitcoin (BTC) increased its losses on December 29 with yet another slide that briefly brought the BTC / USD pair below $ 46,600.

1-hour candlestick chart for the BTC / USD (Bitstamp) pair. Source: TradingView

RSI indicates “oversold” levels

Data from Cointelegraph Markets Pro and TradingView showed the pair lost ground ahead of Wall Street opening to tighten its 48-hour correction to 10.4%.

As the latest move in a familiar pattern of behavior, the market showed that the range Bitcoin was in December is still very much at stake.

Bitcoin price drops below $ 47,000, but trader sees “strong risk / reward ratio” long right now
Bitcoin price drops below $ 47,000, but trader sees “strong risk / reward ratio” long right now

Since market participants have come to terms with a lackluster year-end, the popular trader and analyst has Scott Melker a possible buying opportunity at the current level of the shorter timeframe.

Bitcoin’s Relative Strength Index (RSI), along with other bullish signals, had entered the “oversold” area during the collapse of a classic buy trigger.

“If you are trading short time frames there is a very solid risk / reward going long here,” wrote in one of several tweets about the opportunity.

“RSI oversold, hourly diverging bullish, EQ range, selling with little conviction with tiny volume.”

Subsequently, the BTC / USD pair bounced back from the lows and broke the USD 47,000 mark again.

Melker had previously defended the $ 52,000 pullback, arguing that “nothing has changed” for Bitcoin overall.

Panic selling “has not happened yet”

Not everyone was so optimistic, however.

Peter Brandt, the veteran trader who warned of “false breakouts” in illiquid markets during the holidays earlier this week, now he saw that there was still room to go further down.

The appearance of a phase of “Surrender by Panic” worse than early December, however, is controversial.

According to others, retail investors are unlikely to be mass selling at current levels, suggesting the surge in wallets with small balances and signs of strong Hodl behavior over the course of the year.

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