In 1810, a man named Nathan Rothschild shared some wise advice, suggesting that investors should “buy with a cannon and sell with a trumpet.” This means that it’s a good idea to make purchases when the market is down, and to celebrate (or sell) when things are going well. Many well-known investors follow this approach. They believe that the best opportunity to buy is when prices are low, especially during times when the market is experiencing a lot of selling activity. This strategy allows them to potentially make gains when the market eventually recovers.
Altcoins and the Overall Market Situation
Based on Rothschild’s idea, a recent study was conducted. It analyzed the weekly Relative Strength Index (RSI) heat map from CoinGlass on October 19th. It found that most of the top cryptocurrencies were showing signs of being oversold.
Looking at this situation, it could be seen as a chance for investors to either enter the cryptocurrency market for the first time or add to their existing holdings. However, this should be approached with caution.
The CoinGlass analysis highlighted an important factor. Specifically, when considering the 7-week time frame, it revealed an average weekly RSI level of 33.28. This level indicates a boundary between oversold and average conditions. This average level suggests that the price movement is more likely to continue in a downward trend rather than being a favorable buying opportunity.
The Current Situation of Cryptocurrencies
Surprisingly, cryptocurrencies like Ethereum (ETH), BNB Chain (BNB), Arbitrum (ARB), Ethereum Classic (ETC), Axie Infinity (AXS), Dash (DASH), Uniswap (UNI), and Aptos (APT), which are well-known and have higher market values compared to their rivals, were found to be in the “oversold” category.
Some alternative cryptocurrencies saw a drop in value due to negative news. Additionally, there were other developments that had the potential to impact prices, such as the highly anticipated event related to the Axie Infinity project on October 20th last week.
However, it’s important to remember that relying solely on this data for investment decisions isn’t advisable in technical analysis. Both crypto traders and value investors should also keep an eye on broader market trends and indicators to determine whether it’s the right time to “buy with a cannon” or “sell with a trumpet.”