Bear Breather? Bitcoin Looks Oversold After 50% Price Drop Since June

The premier cryptocurrency by market value fell to a six-month low of $6,515 during the Asian trading hours and is currently trading at $6,880 on Bitstamp.

That represents a 50.43 percent drop from the year-to-date high of $13,880 hit on June 26.BTC has registered losses in all of the last four weeks and last week's 18.72 percent drop is the biggest 7-day decline in nearly two months.

Seasoned traders would argue that in a strong bearish market, the indicator tends to stay oversold for a long time.

While that's true, BTC has already erased 50 percent of the rally from the December 2018 low of $3,122 to the June 2019 high of $13,880.

Bitcoin is flirting with the lower edge of the falling channel seen above, currently at $6,710.

The odds of that support holding ground and fueling a price bounce is strong with the daily RSI reporting oversold conditions.

Young believes a potential drop to $5,000 or even lower would be a long-term buying opportunity.

George McDonaugh, managing director and co-founder of publicly listed cryptocurrency and blockchain investment firm KR1, told CoinDesk that the cryptocurrency is still in the early stages of the bull market.

"We essentially went from $5,000 dollars to $13,500 in 3 months and now, like the swing of a pendulum, the market wants to know where the bottom is again. In my opinion, we are in the early stages of a bull market, you'll see that the bottom this time around is much higher than $5,000. We will find higher lows all the way back to all-time highs," McDonaugh said.

While the cryptocurrency may chart a higher low, a rise to $10,000 and above will take time, as investor confidence tanks during a bear market and V-shaped recoveries are rare.