Bitcoin (BTC) RSI falls below the level seen during the COVID-19 crash…enters oversold territory

Amid ongoing panic selling in the bitcoin (BTC) market, the relative strength index (RSI) has fallen to near record lows. Given similar past episodes, the possibility of a rebound is being discussed.

According to CoinDesk, a media outlet specializing in digital assets (cryptocurrencies), bitcoin’s RSI fell to 17.6 on the 5th (local time). That is well below 30, the level commonly cited as the oversold threshold.

According to the report, there have been only two prior instances in which bitcoin’s RSI dropped to such an extreme level. At the bottom of the 2018 bear market, the RSI hit 9.5, and during the sharp selloff caused by the COVID-19 pandemic in 2020, it fell to 15.6.

Market action at the time showed that prices later rebounded sharply. In 2018, bitcoin rose over about eight months from $3,150 to $13,800. In 2020, bitcoin—around $3,900—surged to $65,000 in just over about a year.

CoinDesk said that “situations where the RSI has moved beyond oversold territory like this have often been interpreted as a signal of a medium-term trend reversal, not merely a short-term bounce.” It added, however, that there is no guarantee past patterns will repeat and that volatility could persist depending on the macroeconomic backdrop and liquidity conditions.

Recently, the bitcoin market has been undergoing a pullback amid volatility in global financial markets and a broadening risk-off mood. With the RSI indicator now at an extreme level, market attention is focused on the price path ahead.