Bitcoin's RSI Approaches Historical Oversold Levels, Potential Rally Ahead
Bitcoin's RSI signals historical patterns that could suggest a rally is imminent, despite current market conditions.
Bitcoin’s Relative Strength Index (RSI) has recently dipped below 30, a level traditionally associated with significant market rebounds. According to Julien Bittel, head of macro research at Global Macro Investor, historical trends indicate that when Bitcoin’s RSI falls into the oversold region, it often precedes a major upward trajectory.
A lot of people have been asking for an update on this chart, so I’ll just leave this here for anyone who needs to see it. This shows the average BTC trajectory following an oversold RSI reading, with RSI falling below 30 at t=0. So far, it’s been pretty bang on. Unless you… link — Julien Bittel, CFA (@BittelJulien)
In the past, Bitcoin prices have demonstrated a remarkable tendency to recover after falling into the oversold category. The analysis provided by Bittel coupled with a historical chart illustrates that this could be a critical juncture for investors. Additionally, he stated that the ongoing bull market may extend into 2026, challenging the long-held belief in a four-year cycle linked to Bitcoin halving events.
Current RSI Indicators
The RSI is a key momentum indicator used to evaluate overbought or oversold conditions. An RSI reading below 30 is often seen as a potential buy signal. Presently, Bitcoin’s RSI sits just below 37, nearing the oversold threshold indicated by TradingView. Only last December, Bitcoin faced a significant downturn with prices dropping to $16,500.
Moving forward, analysts at Milk Road echoed Bittel’s sentiments, suggesting that positive liquidity conditions could support a recovery trend. They emphasized the necessity of interpreting short-term indicators within the context of broader economic indicators, highlighting the intricate link between market liquidity and strategic investment cycles.
“Short-term oversold signals have to be interpreted inside the liquidity and business cycle,” they stated.
Despite a recent decline in Bitcoin prices—falling 4.2% over the last week and settling around $86,600—there remains cautious optimism among analysts about the potential for a market turnaround as conditions stabilize.
