Bitcoin Just Entered Extreme Oversold Levels And Analysts Predict New ATH Targets

Overview

Bitcoin has recently entered an extreme oversold phase, with momentum indicators indicating a potential market exhaustion and trend reversal. Analysts believe that this current drawdown represents a reset in market positioning rather than signaling the end of the ongoing bull market. Historical recovery patterns suggest that Bitcoin may be on the verge of reaching a new all-time high.

Bitcoin Enters Extreme Oversold Territory

Thomas Lee, Co-founder and Chief Investment Officer of Fundstrat Capital, has identified Bitcoin’s current market condition as a significant technical development. He referenced insights from Bittel Julien, head of macro research at Global Macro Investor, who highlighted the extreme oversold status of Bitcoin in the current cycle. According to Julien, this condition may set the stage for Bitcoin to achieve a new all-time high.

In his analysis shared on social media, Lee praised Julien’s findings, noting that historically, extreme oversold conditions in Bitcoin have often led to substantial price recoveries. Julien’s report was prompted by frequent requests for updates on a long-term market model that tracks Bitcoin’s behavior following significant momentum breakdowns. This model focuses on the cryptocurrency’s price trajectory after the Relative Strength Index (RSI) falls below a level widely recognized as indicating extreme oversold conditions.

Julien stated that Bitcoin’s recent price movements have closely mirrored historical technical patterns, as long as the broader bull market structure remains intact. He provided a chart that compares Bitcoin’s current price behavior to the average historical patterns observed after the last five instances when the cryptocurrency entered oversold territory. The point at which the RSI dips below 30 is marked as “time zero.” In previous cycles, this moment has typically been followed by stabilization and a robust upward recovery over the subsequent weeks and months.

Based on these historical averages, Julien believes there is a potential pathway for Bitcoin to reach new all-time highs if it continues to follow past recovery patterns. While he acknowledged that the chart is not flawless, he argued that it remains a valuable analytical tool, particularly if the four-year cycle thesis continues to hold.

BTC Cycle Could Extend Into 2026

Julien’s analysis further posits that the current Bitcoin cycle may extend into 2026, challenging the traditional four-year cycle thesis that many in the crypto community accept. He asserted that Bitcoin’s price cycle has not been primarily driven by halving events, as commonly believed. Instead, he suggested that the cycle is influenced by public debt refinancing, which has been delayed since the onset of the COVID pandemic.

Julien emphasized that the traditional four-year cycle for Bitcoin is now officially broken, attributing this to an increase in the weighted average maturity of the debt term structure. He also pointed out that prevailing liquidity conditions and ongoing interest expense monetization, which exceed GDP growth rates, support a prolonged cycle for Bitcoin.

Additionally, Julien noted that Bitcoin’s price bases typically require time to form and often involve periods of volatility before a significant upward movement occurs. He clarified that his analysis should not be interpreted as an indication of an imminent market decline; rather, it suggests that the bull market remains robust.

From author

The insights provided by analysts regarding Bitcoin’s current market condition and potential recovery patterns are crucial for understanding the cryptocurrency’s trajectory. The emphasis on historical data and technical indicators offers a framework for investors to navigate the complexities of the market. As Bitcoin continues to experience extreme oversold levels, the implications of these analyses may become increasingly relevant.

Impact on the crypto market

• Bitcoin’s extreme oversold status may lead to increased investor interest and potential price recovery.
• Historical patterns suggest that significant bounces often follow periods of oversold conditions, which could influence market sentiment.
• The potential extension of the current Bitcoin cycle into 2026 may reshape investor strategies and expectations.
• The breakdown of the traditional four-year cycle could prompt a reevaluation of market dynamics and investment timelines.
• Ongoing liquidity conditions and public debt refinancing may sustain Bitcoin’s price movements and overall market structure.