Bitcoin’s relative strength index has fallen below 30, a level widely interpreted as signaling oversold conditions, as the cryptocurrency trades near a key support area between $73,000 and $75,000.

The RSI is among the most commonly used tools in technical analysis, helping traders assess momentum and identify potential extremes in price action. Developed in 1978 by mechanical engineer and technical analyst J. Welles Wilder Jr., the indicator was introduced in his book New Concepts in Technical Trading Systems and has since become a fixture across trading desks.

Calculated over a standard 14-day period, the RSI compares recent gains with losses to generate a reading between zero and 100. A move below 30 indicates that selling pressure has outpaced buying by a wide margin, reflecting strong bearish momentum over the recent period.

Such readings are typically labeled “oversold,” implying prices may have fallen too far, too fast relative to recent norms. While the signal does not guarantee a reversal, markets frequently experience short-term rebounds after the RSI drops into oversold territory.

These rebounds can become self-reinforcing. Because many discretionary traders and algorithmic strategies monitor the same indicator, oversold readings often trigger buying activity, increasing the probability of a relief rally.

The setup is generally viewed as more compelling when it occurs near established support levels. Bitcoin is currently trading close to the $73,000–$75,000 range, an area that has repeatedly influenced price behavior. A sell-off in April 2025 stalled in this zone, while the early-2024 rally also lost momentum around the same levels, reinforcing its technical importance.

Taken together, the combination of an oversold RSI and nearby support suggests conditions may be in place for a bounce. However, any recovery would not necessarily mark the start of a new bull cycle.

Like all technical indicators, the RSI can produce false or short-lived signals, particularly during broader downtrends. In 2022, oversold readings were followed by only modest rebounds. More recently, a similar signal in November preceded a period of consolidation before prices resumed their decline last month.

For now, the RSI points to stretched selling pressure, but the durability of any rebound will depend on the broader market backdrop.