Data shows the 14-day Bitcoin Relative Strength Index (RSI) has dropped into the oversold region. Here\u2019s what this could mean for the asset.<\/p>\n
In a new post<\/a> on X, analyst Axel Adler Jr has talked about the latest trend in the RSI of Bitcoin. The \u201cRSI<\/a>\u201d refers to an indicator from technical analysis (TA) that measures the speed and magnitude of changes occurring in any given asset\u2019s price over a specific period. In the current case, the period is 14 days.<\/p>\n This metric is generally used for spotting oversold or overbought conditions for the asset. When the RSI is greater than 70, it can be a sign that the price is heating up and may be due a correction to the downside. On the other hand, it being under 30 can imply the asset is becoming underbought.<\/p>\n Now, here is the chart shared by the analyst that shows the trend in the 14-day Bitcoin RSI over the last couple of years:<\/p>\n As displayed in the above graph, the 14-day Bitcoin RSI has plummeted recently and is now below the 30 threshold. This naturally suggests the cryptocurrency is becoming oversold, at least from the perspective of this indicator.<\/p>\n \u201cOther metrics are also showing alerts,\u201d notes Adler Jr. \u201cI think now all conditions are in place to start testing the ATH.\u201d Though, while bullish developments may have occurred on the RSI and other indicators, BTC has actually declined during the past day.<\/p>\n On-chain data may provide hints about where the next potential support zone could be located for the asset. As the analytics firm Glassnode has revealed in its latest weekly report, the average cost basis<\/a> of the short-term holders is located at $97,100.<\/p>\n