BTC Is Approaching Oversold for the First Time Since 2023

Block Pledges 10% of Profits to DCA Bitcoin Strategy.

After the top at $73,794, Bitcoin started to fade and constantly printed lower highs and lower lows, a clear sign that the market was exhausted. But after all, this is normal behavior after the furious rise that started around $25,000, and the slow grind south does not mean the bull market is over. In fact, a proper move down is needed if an asset is going to make any more advances north.

Prominent crypto figure Arthur Hayes, former CEO of BitMEX, sees Bitcoin’s recent dip as a mere blip on the radar. In his latest commentary, he suggests that the crypto giant has hit a bottom and is poised for a gradual ascent.

He predicts a bounce-back, with Bitcoin climbing back above $60K and maintaining a range until August. Hayes attributes the recent 12% retreat to a necessary “market cleansing,” pointing fingers at various factors, including tax season, Federal Reserve uncertainties, and the aftermath of the Bitcoin halving.

In Hayes’ eyes, Bitcoin will “bottom, chop, and begin a slow grind higher.” After all, the new environment where billions of dollars are entering the market each month will act as a cushion against negative price movements.

Block’s Bitcoin DCA Strategy in Focus

And speaking of money pouring into Bitcoin, Block CEO and “Bitcoin maximalist” Jack Dorsey has recently unveiled his plan to start a monthly Bitcoin purchasing spree, using the dollar-cost averaging (DCA) method.

Dollar-cost averaging involves consistently investing a fixed dollar amount in an asset at regular intervals, no matter the market fluctuations. This approach serves as a buffer against the impact of volatility, potentially providing a lower average cost over time.

The company revealed its intention to channel 10% of its gross profits from Bitcoin-related ventures towards monthly Bitcoin purchases. Block’s pivot towards a Bitcoin-centric portfolio isn’t anything new. As of March 31, 2024, Block proudly boasts ownership of 8,038 BTC on its balance sheet, purchased at different prices since 2020.

Chart Analysis – BTC/USD

Bitcoin is currently changing hands at $59,275 and has exited the descending channel that we’ve talked about before. Usually, a break outside such a pattern signifies the end of a choppy period and a stronger move in the direction of the break.

However, the overall market direction is still up and the Relative Strength Index is approaching oversold. This could mean that if Bitcoin manages to move back inside the channel, it will continue to grind higher.

On the other hand, if the current re-test of the channel results in a bounce, Bitcoin will probably be headed towards $55,000. Keep in mind that today the Non-Farm Payrolls come out, which is a significant event for the US Dollar and could affect BTC/USD as well.