A well-known cryptoanalyst revealed an important indicator that can help pinpoint the bottom of the bitcoin (BTC) market.
A trader under the pseudonym Rekt Capital reported that the BTC Relative Strength Index (RSI) reflects levels reached in January 2015, December 2018, and March 2020, signaling that a rebound downward may be on the horizon.
BTC is approaching the area of a bear market bottom again. When might that happen in this cycle?
The 2018 bear market bottom formed in 1,461 days after the 2015 BMB. If the same symmetry repeats itself, the upcoming BMB will occur in January 2023.
The RSI of an asset is a momentum indicator that measures recent price levels to determine if an asset is oversold or overbought during a particular time period.
Based on this indicator, the trader presented a scenario in which a bear market bottom occurs two months earlier than the projected January 2023 November, and he cites the bitcoin halving that occurs every four years as the reason.
Rekt Capital presented a scenario in which it correlated reaching the bottom with past halvings:
BTC bottomed in 2015 about 547 days before the second halving. BTC bottomed in 2018 about 486 days before the 3rd halving.
If BTC bottoms in 487 or 548 days before the fourth halving in April 2024, that bottom will be in place until October or November 2022.
The trader concluded by saying that the RSI data indicates that bitcoin is oversold, meaning that those who bought during a multi-month bear market are likely to be rewarded during the next cycle.
It is clear that BTC is entering a state of oversold RSI.
Historically, long-term investors in BTC who bought in these conditions have benefited from high ROIs for many months to come.