Sell-Off Over? Bitcoin's RSI Just Hit Its Lowest Level Since 2016

An indicator meant to measure the rate at which an asset is being bought or sold may foretell a future bump for the price of bitcoin.

AccessTimeIconJun 13, 2018 at 9:15 p.m. UTC
Updated Aug 18, 2021 at 9:19 p.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

Signs are beginning to emerge that bitcoin's sell-off today may be overextended.

After hitting a 70-day low of $6,133 on CoinDesk's Bitcoin Price Index (BPI), bitcoin's relative strength index (RSI) hit a level (26.4) last seen in August of 2016, according to data from the Bitfinex exchange.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • The relative strength index, or RSI, is used for identifying overbought and oversold conditions of an asset by "comparing the magnitude of recent gains and losses over a specified time period to measure speed and change of price."

    When such levels are hit, the indicator suggests price action is approaching a level below the asset's true value, where a price bounce tends to occur.

    dflm9dnw0akymkt

    BTC/USD rarely hits oversold levels (<30) in the daily time frame, but when it does, price has historically performed well for the bulls.

    February 6th was the last time RSI levels were below 30, and at that time, prices rallied from $6,000 to $11,788 in just two weeks, resulting in a ~96 percent gain.

    Prior to that, on August 14th, 2016, BTC registered an RSI level just above 26 when the price showed $563 on Bitfinex. Even through today, the price of bitcoin has not gone below $563 and current levels represent a ~980% price increase.

    dflqxolw0asxp0q

    But while the oversold indicators tend to signal downtrend exhaustion, bulls might want to still proceed with caution before celebrating as bitcoin's daily RSI has reached lower levels.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.