Bitcoin Price Rebound Expected as RSI Falls to Lowest Level in Almost Three Years
Bitcoin (BTC) traders are anticipating a short-term rebound as a key BTC price metric has fallen to its lowest level in almost three years. Data from Cointelegraph Markets Pro and TradingView showed extremely “oversold” conditions on the BTC/USD Relative Strength Index (RSI). This development has sparked hopes of a near-term price reversal, with some analysts suggesting that the cryptocurrency may be due for a significant rally.
The RSI measures trend strength and contains three key levels for observers: the 30 oversold limit, the 50 midpoint, and the 70 overbought threshold. When the price breaks above these levels, traders can draw conclusions about the future of a particular up or down trend depending on the direction. During bull markets, ETH regularly spends extended periods in overbought territory. The current RSI reading has fallen to 35, a level last seen in January 2023 when Bitcoin was trading at around $15,500 to $17,000.
Historical Precedent for Price Reversal
Analyst Jelle noted in an X post that “historically, when the weekly RSI marks this level, it is time to pay attention,” adding that “either we’re close to rock bottom, or we’re about to experience a lot more pain.” Mister Crypto also commented that “Bitcoin appears to be more oversold than ever before,” suggesting that “an upswing is very likely.” The BTC/USD weekly chart shows the RSI falling from local highs of 64 in September to 35 at the time of writing.
BTC/USD weekly chart. Source: Cointelegraph/TradingView
On-Chain Data Suggests Undervaluation
On-chain data provider CryptoQuant has explained how Bitcoin may currently be undervalued based on its network value for transactions (NVT), a metric that compares market capitalization to its actual network usage. The chart below shows that Bitcoin’s NVT Golden Cross has fallen to historically low levels near -0.6, “an area that reflects structural undervaluation of the network,” CryptoQuant analyst MorenoDV_ said in his latest Quicktake analysis.
Bitcoin: NVT golden cross. Source: CryptoQuant
The metric has risen slightly to -0.32 in recent days, indicating that the price is gradually aligning with transactional fundamentals after a steep valuation discount. However, “the indicator remains in negative territory, meaning Bitcoin’s price is still conservative relative to its network utility,” the analyst said, adding that “the current situation suggests a market transition from severe undervaluation to equilibrium, a phase historically associated with accumulation and structurally sounder price discovery.”
Expert Insights and Market Expectations
Not all traders are quick to suggest that BTC price will see a recovery bounce due to oversold conditions. YouTuber Lark Davis noted that “when $BTC was so oversold in 2018, it fell another 49%. In 2022, it fell another 58%,” suggesting that Bitcoin could fall another 40%. However, other analysts remain optimistic, with CryptosRus responding to MorenoDV_’s analysis that “the price is recovering now, but the valuation is still discounted compared to usage,” adding that “this setup has only appeared a few times in Bitcoin’s history.”
BTC/USD two-week chart. Source: Mister Crypto
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