Bitcoin Shows Signs of Being Oversold with RSI Signal – Could Result in a $135K Reversal Soon?
Bitcoin (BTC) has recently experienced a significant drop in price, falling to around $100,000 from its previous high of $125,000 in early October. This decline has triggered oversold conditions, indicated by Bitcoin’s Relative Strength Index (RSI) reaching 36, a level historically associated with strong bullish reversals. Analysts are now closely watching to see if Bitcoin can hold its ascending channel support, anticipating a potential rebound to $135,000.
The oversold signal on Bitcoin’s RSI has caught the attention of traders, with many interpreting it as a sign that the market may have found a bottom. This sentiment is captured in a statement by trader @FriedrichBtc, who confidently proclaims, “RSI oversold, bottom is in. $135K next!” Previous market patterns have shown that similar RSI levels often precede significant price rebounds of 15–25% within a few weeks.
Additionally, Bitcoin has a history of bouncing off its 50-week moving average (SMA), acting as a support level for major rallies since 2023. Chart analysis by @wacy_time1 highlights how Bitcoin’s previous rallies, starting from this moving average line, have led to substantial price increases. The current test at around $101,000–$103,000 represents the fifth touch of this crucial support level, which has historically triggered gains exceeding 30%. However, there are mixed sentiments in the market, with some traders bullish on the rebound potential while others warn of a deeper correction if Bitcoin fails to hold this level.
The debate between bears and bulls continues to influence market sentiment, with conflicting views on Bitcoin’s future price trajectory. Popular YouTube channel Altcoin Daily posted a video titled “It’s so over #Bitcoin,” sparking discussions on whether the recent correction is a precursor to a significant rebound. While some remain optimistic about Bitcoin’s resilience and potential for new all-time highs, skeptics caution against structural weakness if the trendline is repeatedly breached.
In terms of technical analysis, Bitcoin’s daily RSI below 40 reflects a temporary exhaustion among sellers, signaling a potential relief rally if support above $100,000 is maintained. Traders are eyeing the $120,000–$135,000 resistance zone as a target for a recovery bounce. However, the sustainability of this bounce hinges on various macro factors, including ETF flows and liquidity trends in the crypto derivatives market.
Despite recent volatility, institutional interest in Bitcoin remains steady, as evidenced by inflows into spot Bitcoin ETFs from major financial players like BlackRock, Fidelity, and Grayscale. Bitcoin’s market cap continues to hold above $2 trillion, maintaining its dominance in the broader crypto market. As Bitcoin faces a critical juncture, traders are closely monitoring indicators like RSI levels, moving averages, and institutional sentiment to gauge whether the $135,000 recovery is within reach.
