Bitcoin RSI Nears Oversold Levels That Historically Triggered Major Rallies

Bitcoin’s average price behavior after the RSI (relative strength index) drops below 30 has nearly always rebounded, according to the macro research head at Global Macro Investor, Julien Bittel.

He shared a chart showing the average market path the last five times Bitcoin’s RSI broke below 30. The analyst also rejected the popular belief that Bitcoin follows a four-year cycle tied to its halving events.

RSI Falling Into Oversold

RSI is a momentum indicator that measures whether an asset is overbought or oversold on a scale of zero to 100. Below 30 means oversold, potentially undervalued, and may bounce up, while above 70 means overbought, potentially overvalued, and may pull back. It is calculated by comparing the magnitude of recent gains to recent losses over a period (typically 14 days).

Bitcoin RSI on the weekly chart is currently just below 37, suggesting it is close to oversold territory, according to TradingView. The last time it was this low in this time frame was at the bear market bottom in December 2022, when BTC was trading at $16,500.

Over the next two and a half years or so, it surged 660% to an all-time high in October this year and remains in an uptrend on the weekly time frame.

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Bittel is also among several analysts who believe that the bull market cycle will extend into 2026.

“As we’ve outlined many times, based on our work on the business cycle, the current path of financial conditions, and our expectations for overall liquidity, the balance of probabilities is that this cycle extends well into 2026.”

He argued that the historical four-year pattern was actually driven by government debt refinancing cycles, not the halving, and that post-COVID fiscal policy pushed this cycle out by one year.

Oversold Dips Work Higher

Macroeconomic analysts at Milk Road agreed with the hypothesis.

“Short-term oversold signals have to be interpreted inside the liquidity and business cycle,” they stated.

They added that if conditions keep improving and money keeps flowing back into markets, “these oversold dips tend to work higher over time, even if it’s messy along the way.”

“The bigger mistake is assuming every pullback now marks the start of a new bear market, when the macro setup still points to an extended cycle into 2026.”

The short-term outlook isn’t so pretty with Bitcoin trading down 4.2% over the past week and hovering around $86,600 at the time of writing.

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