Sources: Glassnode
Technical indicators across the board are suggesting that BTC is oversold. Most notably, the Relative Strength Index (RSI) is at a level that marked some of the more pivotal moments in bitcoin’s history. Other indicators, such as the moving average convergence divergence (MACD), are suggesting BTC still has some strength despite being ~50% off of the $69,000 all-time high.
1. Daily Relative Strength Index (RSI)
Bitcoin’s Relative Strength Index currently sits at 23 and is as oversold as it was in May 2021, March 2020, and November 2018. Bitcoin was trading during these times at ~$36,000, ~$6,000, and ~$3,500 respectively. These points in bitcoin’s history have marked some of the best buying opportunities. However, the current fundamental landscape diverges to varying extents from these points in time.
The environment during the crash in Spring 2021 most closely resembles the current fundamental backdrop. The Nasdaq was down ~7% from its high at the time and growth and tech stocks were down by a similar magnitude (or more in some cases). RSI began to bounce from its bottom of 29 at this time, which created a bullish divergence as price inched lower.
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