Bitcoin has dropped into deeply oversold territory, with its Relative Strength Index (RSI) falling to levels not seen since the 2020 pandemic crash. The daily RSI has reached around 15.5, far below the 30 threshold that typically signals oversold conditions. This comes after Bitcoin lost roughly 30% of its value in the past month.
Historical Patterns Suggest Possible Recovery
Analysts point to previous instances when Bitcoin’s RSI hit similar lows. During the March 2020 sell-off and a correction in February 2026, the cryptocurrency recovered by about 50% and 30%, respectively, after hitting those levels. Currently, the $60,000 support level is being closely watched. If it holds, Bitcoin could see a technical uptrend toward the $70,650 region, where the 20-day exponential moving average (EMA) sits. However, losing the $60,000 support might push prices down to the mid-$50,000 range.
On-Chain Signals Show Intense Pressure
On-chain data also suggests growing stress. The profit-loss ratios for short-term Bitcoin investors have dropped to historically low levels, indicating that many recent buyers are selling at a loss. Analysts say market sentiment is approaching panic.
Crypto analyst Scott Melker noted that around 5.3 million Bitcoin are currently held at a loss by long-term investors. This exceeds the levels seen during the FTX crash and represents the highest amount of unrealized losses since the 2020 pandemic sell-off. Melker also observed that sentiment and price movements are tightly linked. Investors were overly optimistic at the May peaks but have turned extremely pessimistic as of early June. These sentiment shifts often suggest that market bottoms may be near, though they are not definitive reversal signals on their own.
