Traders of Bitcoin (BTC) anticipated a short-term rebound as a key BTC price indicator dropped to its lowest point in nearly three years. Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD relative strength index (RSI) reached extremely “oversold” conditions.
Highlights:
Bitcoin’s RSI, historically associated with significant BTC price increases, indicates a potential price reversal in the near term.
Bitcoin’s network value-to-transaction ratio suggests it is undervalued at its current price.
BTC price dip lowers RSI back to 2023 levels
Bitcoin’s 36% decline to $80,500 on November 21 from its all-time high of $126,000 has notably affected the high-time frame RSI.
Related: Bitcoin rebounds following Japan’s rate hike as Arthur Hayes predicts dollar at 200 yen
On the weekly chart, the RSI decreased from local highs of 64 in September to 35 at the time of writing, a level last observed in January 2023 when Bitcoin traded between $15,500 and $17,000.
“Historically, when the weekly RSI reaches this level, it’s worth noting,” remarked analyst Jelle in a post on X, adding:
“Either we’re nearing a bottom, or more pain is imminent.”
RSI measures the strength of trends and contains three essential levels for analysis: the 30 oversold boundary, the 50 midpoint, and the 70 overbought threshold.
When prices cross these levels, traders derive insights about potential future trends. During bullish markets, ETH often lingers in overbought territory.
“Bitcoin appears to be the most oversold it’s been throughout this cycle,” stated Mister Crypto in a post on X, mentioning the Stochastic RSI, also illustrated in the two-week chart below.
“A bounce seems highly probable.”
Not all traders were quick to affirm that the BTC price was destined for a relief bounce due to these oversold conditions.
“When $BTC was this oversold in 2018, it fell another 49%. In 2022, it dropped another 58%,” commented YouTuber Lark Davis in a post on X, suggesting that Bitcoin could slide an additional 40%.
“These bottoms often take longer to form than anticipated and can be more painful than expected.”
As reported by Cointelegraph, a significant concentration of liquidity clusters above the spot price strengthens the argument for a potential short-term BTC/USD reversal.
Bitcoin currently undervalued at $87,000
Onchain data provider CryptoQuant explained how Bitcoin may presently be undervalued based on its network value to transaction (NVT), a metric that assesses market cap against actual network usage.
The chart below underscores that Bitcoin’s NVT Golden Cross has plummeted to a historically low level near -0.6, “a zone demonstrating a structural undervaluation of the network,” as analyst MorenoDV_ noted in his latest Quicktake analysis.
This metric has slightly risen to -0.32 in recent days, signaling that prices are beginning to realign with transaction-driven fundamentals following a sharp valuation discount.
However, “the indicator remains in negative territory, indicating that Bitcoin is still conservatively priced in regard to its network utility,” the analyst stated, adding:
“The current setup indicates a market moving from deep undervaluation toward equilibrium, a phase historically tied to accumulation and healthier price discovery.”
“The price is currently recovering, but the valuation remains discounted against usage,” observed analyst CryptosRus in response to MorenoDV_’s analysis, further stating:
“Such a setup has appeared only a few times in Bitcoin’s history.”
It’s important to note that the last two instances when the NVT Golden Cross reached such levels occurred in April 2025 and at the bottom of the 2022 bear market, leading to subsequent BTC price increases of 60% and 350%, respectively.
This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should conduct their own research prior to making decisions. While we aim to offer accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may include forward-looking statements that are subject to risks and uncertainties. Cointelegraph is not liable for any loss or damage arising from reliance on this information.
This article does not provide investment advice or recommendations. Every investment and trading decision involves risks, and readers should conduct their own research before making any decisions. While we strive to present accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information contained herein. This article may contain forward-looking statements that carry risks and uncertainties. Cointelegraph is not responsible for any loss or damage resulting from reliance on this information.
