Bitcoin Hits Third Most Oversold Level Ever, Major Upside Possible
By John Nada·Feb 5, 2026·2 min read
Bitcoin's RSI has dropped to 17, signaling extreme oversold conditions. History suggests a major rebound may be on the way.
Bitcoin's Relative Strength Index (RSI) has plunged to a staggering 17, marking it as the third most oversold condition in its history. Only the bear market bottom in 2018 and the Covid crash in 2020 recorded lower readings. This significant drop follows a tumultuous day where Bitcoin fell to around $65,000 amidst heavy liquidations fueled by bearish sentiment.
The daily RSI serves as a momentum oscillator that helps assess whether an asset is oversold or overbought. With Thursday's reading of 17.6 on a scale from 0 to 100, Bitcoin now sits in heavily oversold territory. The previous two occasions of such readings—during the 2018 market bottom at 9.5 and the 2020 crash at 15.6—preceded dramatic upward movements in the price.
In those earlier instances, Bitcoin rewarded buyers handsomely. After the 2018 bottom, BTC surged more than fourfold over the following eight months, climbing from $3,150 to $13,800. Similarly, following the 2020 crash, Bitcoin ascended from $3,900 to a peak of $65,000 just over a year later. The report noted that investors are often tempted to sell during weak market conditions, but savvy traders see these oversold signals as buying opportunities.
Thursday’s market carnage resulted in over $1.5 billion in liquidations across crypto derivatives. With liquidity in the $70,000 to $80,000 range effectively wiped out, this could set the stage for a significant rebound, echoing past recoveries. The current sentiment may be dismal, but history suggests that market corrections can lead to explosive gains.
As the market grapples with the aftermath of heavy selling, traders are left weighing the potential for a rebound against the prevailing bearish outlook. The RSI's current level indicates an extreme position, which historically has signaled a reversal. Bitcoin investors should brace for volatility but remain alert to the potential for a sharp upside as conditions stabilize.
This moment could be pivotal for Bitcoin as it tests the resolve of both bulls and bears. The cryptocurrency market is notorious for its cyclical nature, and the current oversold condition may present a unique buying opportunity for those willing to take the risk. In essence, while the immediate future appears challenging, the historical data suggests that significant upside could be on the horizon for Bitcoin.