Bitcoin shows key bear market bottom signals at the $87,000 price level, analysts point out that BTC price historical patterns may repeat again.
Key points:
The BTC rate RSI indicator has fallen to levels only observable at bear market bottoms.
Analysis suggests that BTC price movements may be undergoing a "significant cyclical reset."
As BTC prices plummet, the cryptocurrency long-short ratio breaks historical patterns.
Analyst On-Chain Mind posted on the X platform on Tuesday, indicating that Bitcoin's rate relative strength index (RSI) has shown a rare single-digit reading.
In recent weeks, comparative analyses of the Bitcoin bear market have emerged, and now, a leading BTC price indicator strongly suggests that the market bottom has arrived.
The rate RSI, which measures recent price momentum changes, has dropped below 10/100, reaching one of its most "oversold" levels in history.
"The rate RSI indicator on the 3-day chart has just reached its lowest reading since the last three bear market bottoms," On-Chain Mind stated.
The accompanying chart shows similar patterns that appeared at the end of the 2018 BTC bear market and mid-2022—about six months before the most recent true bear market found a long-term bottom.
"This is one of the most reliable and widely tracked momentum exhaustion indicators, and the levels it shows now only occur during significant cyclical resets," On-Chain Mind added.
From multiple perspectives, the current BTC price behavior is distinctly different from past bearish phases.
Not all traditional price indicators respond the same way to the latest market dynamics, including BTC's long-short ratio.
Joao Wedson, founder and CEO of the crypto analysis platform Alphractal, discovered an unusual phenomenon unfolding this week.
"For years, we have identified several strong Alpha signals in the crypto market. The most reliable one has always been: when BTC's long-short ratio rises above the average level of major altcoins, it historically usually indicates that a price bottom is forming. But this time, a different situation has occurred," he explained to his followers on the X platform.
Wedson pointed out that this phenomenon could have adverse effects for bulls. Traders' eagerness to go long on BTC in an attempt to catch the bottom may encourage large players to liquidate these long positions by further driving down prices.
Related: Kevin O'Leary: The likelihood of a Fed rate cut in December is low, but Bitcoin (BTC) will be fine.
This article does not constitute any investment advice or recommendation. All investment and trading activities carry risks, and readers should conduct their own research before making decisions.
Original article: “Bitcoin (BTC) 'more reliable' RSI indicator reaches bear market bottom zone at $87,000”
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