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Bitcoin’s unusual oversold RSI decline indicates a prolonged, gradual recovery period ahead.
Historical patterns indicate that the present movement may result in a consolidation phase around the $60,000 area in the upcoming months prior to the next upward surge.
BTC RSI 14 (Checkonchain)
Key points:
- This month, Bitcoin’s 14-day Relative Strength Index (RSI) has fallen below 30 for the third time in its history, according to checkonchain.
- The RSI functions as a momentum indicator that evaluates the pace and scale of recent price shifts by comparing average gains and losses over a span of 14 days.
- Similar RSI levels observed in 2015 and 2018 were succeeded by extended consolidation periods prior to significant breakouts.
Bitcoin’s 14-day Relative Strength Index (RSI) has declined below 30 for the third time in its history this month, according to checkonchain.
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The RSI is widely utilized for assessing an asset’s momentum by analyzing the speed and extent of recent price changes and comparing average gains and losses over a defined period of 14 days.
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The index generates a value ranging from 0 to 100, with readings exceeding 70 typically viewed as overbought, while values below 30 suggest oversold conditions, implying that selling pressure may be excessive. Bitcoin’s 14-day RSI has not reached 100 since December 2024, when Bitcoin first exceeded $100,000.
Past instances of readings below 30 have indicated prior cycle bottoms. In January 2015, Bitcoin’s RSI dropped to about 28 while prices lingered near $200. Subsequently, the market underwent approximately eight months of consolidation before a significant recovery commenced. A similar trend was noted in December 2018 when the RSI fell below 30 around $3,500, followed by about three months of sideways accumulation before Bitcoin surged higher.
BTC is currently trading near $66,000, with market sentiment remaining in “fear” or “extreme fear” on the Crypto Fear & Greed Index for a substantial portion of the past 30 days. Since reaching a peak in October, Bitcoin has lost over 50%, briefly dipping towards $60,000.
Historical data indicates that the current movement may result in consolidation around the $60,000 mark in the coming months before the next upward movement.
