Bitcoin (BTC) has fallen by more than 10% in the past two weeks, dropping from approximately $98,000 to around $86,000 at the time of writing. Heavy selling pressure has pushed the flagship cryptocurrency to oversold levels not seen since August 2024.
Bitcoin is oversold, time to buy?
According to Post X by seasoned crypto analyst Ali Martinez, BTC has entered oversold conditions the likes of which it hasn't seen since August 2024. Specifically, the Relative Strength Index (RSI) for bitcoin has dropped to its lowest level in seven months.
For the uninitiated, the RSI measures bitcoin's momentum on a scale of 0-100, with values above 70 signaling overbought conditions and below 30 indicating oversold levels. According to the following chart, BTC's RSI fell below 30, indicating that the digital asset could be significantly oversold.
It should be noted that the last time BTC was this oversold - in August 2024 - it resulted in a 33% spike in price, pushing the digital asset from $49,000 to $64,000 in two weeks. A similar trajectory today could push BTC to around $110,000.
Famed crypto investor The Wolf Of All Streets had similar thoughts about Bitcoin's RSI. The investor shared the following 4-hour chart, saying:
Ascending divergence with oversold RSI is still in place. Currently the RSI is still making a higher low. We need to see a clear "elbow up" on the next candle to confirm. Nothing here yet.
Meanwhile, crypto analyst Rekt Capital predicts there could be further downsides for BTC. The analyst highlighted that BTC is close to filling the Chicago Mercantile Exchange (CME) gap between $78,000 to $80,700, which was created in November 2024.
For the uninformed, the CME gap refers to the price difference between bitcoin's last traded price on the CME before the weekend and its price when the market reopens. Bitcoin is often thought to fill these gaps as part of a natural market correction, with the gap acting as a level of price support or resistance.
Mixed opinion on the price action of BTC
The recent retreat of the crypto market has led to divided opinions among analysts. For example, a former Glassnode analyst recently said that the chances of being in a bear market are "not great."
Similarly, a recent analysis by Andre Dragosch, European head of research at Bitwise, suggests that BTC may be undervalued at current market prices. On the contrary, Standard Chartered predicts that there could be another 10% drop in the price of BTC.
Although opinion on Bitcoin's short-term price action may be divided, the long-term bullish argument for the digital asset remains intact. At press time, BTC was trading at $84,963, down from 2.4% in the past 24 hours.
