Fundstrat Strategist Believes Bitcoin Could Be Bottoming

&l;p&g;Robert Sluymer, Managing Director and Technical Strategist at &l;a href=&q;; target=&q;_blank&q;&g;Fundstrat Global Advisors&l;/a&g;, monitors Bitcoin and other cryptocurrencies. He has a three phase technical process to follow trend shifts across markets. The methodology allows him to track the relative performance of Bitcoin and other cryptocurrencies to forecast leadership rotations within the Fundstrat Crypto FX10 Large-cap and FX tokens.

&l;img class=&q;dam-image getty size-large wp-image-913110732&q; src=&q;×0.jpg?fit=scale&q; data-height=&q;656&q; data-width=&q;960&q;&g; A woman shows her t-shirt with different cryptocurrency logos including Bitcoin, Ethereum, Ripple, Litecoin, Dash and Monero. Photo by Chesnot/Getty Images

Bitcoin broke a downward pattern in April, peaked in early May after what &l;a href=&q;;&g;appeared to be pressure from tax loss selling&l;/a&g; and has been in another downtrend for almost a month. Sluymer believes that &a;ldquo;while it is premature to conclude the correction is over, there was a positive technical development this week suggesting the first stage of a three stage bottoming process is developing. Short-term momentum indicators are beginning to bottom.&a;rdquo;

&l;p class=&q;tweet_line&q;&g;He sees this as the first phase as momentum indicators begin to decelerate or bottom . This is the second derivative of growth rates, which a number of investors use to help determine when an asset is nearing its low.

The chart below Y-axis is on a linear scale. It shows Bitcoin&a;rsquo;s downtrend from its high of about $20,000 in December through early April. It bottomed around $6,500 and then broke the downtrend in the middle of the month by moving up to $9,500. However, it began another downtrend in May and is around $7,600 currently.

&l;img class=&q;size-full wp-image-11988&q; src=&q;; alt=&q;Bitcoin price chart with linear scale&q; data-height=&q;633&q; data-width=&q;1000&q;&g; Bitcoin price chart with linear scale

This second chart has&a;nbsp;a logarithmic scale Y-axis. It essentially shows the same downward trends but they are not as sharp as the linear scale graph. Also both graphs show Bitcoin&a;rsquo;s RSI or Relative Strength Index (the top portion of both graphs) being in an oversold condition. While the current 36.78 RIS reading isn&a;rsquo;t as low as the two previous ones, it is close and is an indication that Bitcoin could be set up for at least a short-term bounce.

&l;img class=&q;size-full wp-image-11989&q; src=&q;; alt=&q;Bitcoin price chart with logarithmic scale&q; data-height=&q;633&q; data-width=&q;1000&q;&g; Bitcoin price chart with logarithmic scale


&l;p class=&q;tweet_line&q;&g;Sluymer is seeing multiple tokens starting to improve vs. Bitcoin . Of the 10 largest capitalized tokens he&a;nbsp;believes that EOS and TRX or TRON are exhibiting strong relative performance to Bitcoin and for the next 40 largest GNT or Golem, MIOTA or IOTA, ZRX or 0x and WTC or Waltonchain are at the early stages of relative leadership.&l;/p&g;

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