This is a technical analysis post by Coindesk analyst and chartered market technician Omkar Godbole.
A key technical indicator is flashing a signal marking a slowdown in bitcoin Downtrend in February.
The price of BTC fell below $90,000 early Tuesday, down 28% from a record high of more than $126,000 reached early last month. Using the 14-day relative strength index (RSI)—a widely followed measure of price momentum—has dipped below 30, signaling an oversold condition. This means BTC’s continued slide is sharp enough to invite a pause or a potential rebound.
But an oversold RSI should not be taken at face value. The indicator can stay in this territory longer than the buyers can hold their ground. Many experienced traders view an oversold RSI as a sign of strong downward momentum, rather than an immediate reversal.
What matters is whether the price action confirms the signal. Therefore, traders should look for emerging support levels or candlestick patterns, such as doji or candles with long lower wicks, which suggest that selling pressure is easing. If those appear, they will validate the oversold RSI and lay the groundwork for a bounce.
The last time the RSI dipped below 30 in late February, Bitcoin was trading under $80,000. That marked a slowdown in the downtrend, followed by a bottom near $75,000 in early April. Traders would be wise to watch closely for signs of a similar move today.
Since the RSI is so widely monitored by traders, this signal can become a self-fulfilling prophecy, where collective trading actions based on the indicator amplify its effect.
