Bitcoin RSI has historically presented oversold levels that have triggered major rallies

A key technical indicator has historically been at levels that preceded major Bitcoin rallies, but will it happen again?

According to Julian Bittel, Head of Macro Research at Global Macro Investor, Bitcoin's average price behavior always reverts after the RSI (Relative Strength Index) dips below 30.

He shared a chart showing the average market path of the last five times Bitcoin's RSI broke below 30. The analyst also refuted the popular belief that Bitcoin follows a four-year cycle tied in half of its events.

RSI falling into oversold

The RSI is a momentum indicator that ranges from zero to 100 and measures whether an asset is overbought or oversold. Below 30 means oversold, likely undervalued and likely to rise, while above 70 means overbought, predictable and likely to pull back. It is calculated by comparing the amount of recent profit to the loss over a period of time (typically 14 days).

The Bitcoin RSI on the weekly chart is currently below 37, indicating that it is close to oversold territory, according to TradingView. The last time it was this low in this timeframe was at the bottom of the bear market in December 2022, when BTC traded at $16,500.

Over the next two-and-a-half years or so, it surged 660% in October this year and remains at a high on the weekly timeframe.

A lot of people have been asking for an update to this chart, so I'll just leave it up to anyone who wants to see it.

This shows the average direction of BTC following the oversold RSI reading, with the RSI falling below 30 at t=0.

So far it has been so beautiful.

Unless you are… pic.twitter.com/FRLt5w7oFT

— Julien Bittel, CFA (@BittelJulien) December 17, 2025

Bittel is one of several analysts who believe the bull market cycle will extend into 2026.

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“As we've said many times, based on our work on the operating cycle, the current financial situation and our expectations for overall liquidity, the balance of factors is that this cycle will last until 2026.”

He argued that the historical four-year pattern is actually driven by cycles of government debt amortization, not halving, and that post-Covid fiscal policy has pushed this cycle forward by a year.

Oversold dips work better

Macroeconomic analysts at Milky Way agree with the hypothesis.

“Short-term oversold signals should be translated into liquidity and the business cycle,” he said.

If conditions continue to improve and money continues to flow back into the markets, “these oversold dips will continue to run higher, even if the road is bumpy,” he added.

The biggest mistake is that the macro setup still points to an extended cycle to 2026, with each pullback signaling the start of a new bear market.

The short-term outlook isn't pretty, with Bitcoin trading down 4.2% over the past week and hovering around $86,600 at the time of writing.