On Thursday, Bitcoin experienced a sharp decline, dropping to approximately $65,000 amid widespread sell-offs fueled by strong bearish sentiment. However, one key technical metric indicates that the cryptocurrency might not only rebound but also embark on a significant upward trajectory.
The daily Relative Strength Index (RSI) for Bitcoin—a widely recognized momentum indicator used to determine if an asset is oversold or overbought—registered a value of 17.6 on Thursday (on a scale from 0 to 100). This level reflects extreme overselling and is only surpassed in recent history during two major events: the Covid-19 crash in 2020 when it hit 15.6, and the market bottom in 2018 when it plunged to 9.5.
Both of these past instances resulted in substantial gains for investors who bought at those lows. In 2018, Bitcoin’s price surged more than fourfold within eight months—from $3,150 up to $13,800. Similarly, after the Covid crash in 2020, Bitcoin rocketed from $3,900 to reach an all-time high near $65,000 just over a year later.
The turmoil on Thursday led to liquidations exceeding $1.5 billion across various crypto derivatives markets. While many might be inclined to sell amid such weakness, savvy traders recognize that these deeply oversold conditions present prime buying opportunities—especially since liquidity between the $70,000 and $80,000 range has essentially vanished.