Bitcoin Oversold: Relief Rally or Bear Market Trap?

追加: 2026-06-05

[00:00:00]Bitcoin has now reached this support zone we talked about yesterday where we have these previous swing lows that the price might react to. Uh this the area between yeah early February and mid-March, end of March and we're now in this zone. The market is very much oversold on the daily and on the weekly.

[00:00:21]So we're going to take a look at that.

[00:00:23]We'll take a look at the Elliot wave structure. We want to talk about oh could we get a bounce or not? I know people are waiting for a bounce um even though we are obviously in a bare market. So any bounce will likely just be corrective and I will also show you some interesting cost basis bands onchain indicator which might help us to understand where it can make sense to accumulate Bitcoin. Now, I've often said, and this is before we dive into any Elliot wave count or into any onchain indicator, whenever the daily RSI on the Bitcoin chart is oversold, it usually means we should get a bounce.

[00:01:08]And that doesn't have to be today or tomorrow, but it usually is not the worst time to accumulate. And I'm not telling you to do that. I'm just telling you it's from a statistical point of view it really is the case and I wanted to do a bit of a deep dive into that first because yes we're back to oversold on the daily chart and people ask me well if we really broke down and we're oversold shouldn't we get a bounce and we could absolutely get a bounce however it doesn't need to happen it's very important to understand this indicator properly I mean first of all the RSI can provide just like the price structure resistance and support. Now, Bitcoin daily RSI very useful for resistance.

[00:01:57]For you know, for the last few months, we've been watching this trend line here. The market got rejected and so that was not surprising. Uh it's a bare market, so resistance often holds on the RSI. The daily RSI is now oversold.

[00:02:12]whenever that happened in the past very often at least I think I made I made oh I think it's probably already two years ago I made a video on our MCO global channel where I highlighted that whenever the daily RSI is oversold and showed you the history of Bitcoin it was like in nine of 10 cases we saw it was really profitable to buy um but it's important to understand that obviously in a bare market the bounce might be weaker so we had a similar situation in February we had a similar situation in November. We had a similar situation even here. Yeah, in February 25. But you see, when the market is oversold, it doesn't mean we have to go higher straight away. We could simply form a slightly lower low on the price chart and a higher low on the RSI. That's a so-called bullish divergence. So, it's important to understand that. But look, February 25, then here oversold in August 24. one of the best times to accumulate really um here. But again, I'm I'm showing you the bull market. So, let's go to the bare market because what I showed you in recent weeks again and again was this time period here between um the 2022 January 22 lows and then the highs in March, April and often compared this period and I showed you look when we break down we might break down directly and I explained to you the 200 day moving average provided resistance back then and I shared with you that um this is a resistance box that was reached at the time we had a three-wave rally. Fibonacci targets were reached and we had something similar this year.

[00:03:46]But if we look at the RSI, look look the market got oversold. But when let's zoom in a little bit. So I'm saying look what do we have now? We also have a breakdown from this bare flag. The market got oversold. But where did it get oversold?

[00:04:03]It got oversold here already around 30k.

[00:04:07]Then we got a weak bounce and the market crashed down. Don't underestimate this.

[00:04:12]This is significant. Crashed down to 25K.

[00:04:17]Still oversold before we got that bounce and that bounce might look small but it was 27%.

[00:04:29]So again in a bare market the bounce might be weaker and then however we formed the lower low and again oversold on the daily but the market can still drop further when oversold.

[00:04:40]approach with approach this with caution when we are in a bare market and that has been clearly the thesis yeah that we're in a bare market I mean I know people always tell me this time will be different and just because like like in Q4 like again in Q4 we were watching for a top right and as per the four-ear cycle Q4 usually forms a top in the in the in the you know in the post-h havinging year and people back then were like they tried to be smart and were like well this time is going to banana zone, right? because some people told them that and um just because Bitcoin nor you know even though normally Bitcoin does something different and then yeah but everybody watches the four years cycle so it's never going to happen right okay I mean I personally expect the four-year cycle to break at some point but until it breaks we follow it right we can at least not not as a primary tool let's let's use Elliot wave as primary tool because Elliot wave will tell us when something different is playing out but for now they are lying So, and now everybody told me like because just because uh everybody now is bearish, the market has to go up, but it's not. It's just following the wave code. It's just following the bare market thesis. I've been I've been highlighting here many, many times. I'm not the only one. Yeah, I'm not the only one. But still, be careful of those people who tell you that we're going to go to the moon without any clear setup or structure.

[00:06:07]So, I'm just giving you the the structural read of the market. Like, I'm not making the structures. Bitcoin is doing that, right? Bitcoin is Bitcoin is giving us the price structure. And there wasn't really anything bullish to read into this from the February lows. Of course, we were watching for a bounce.

[00:06:22]Of course, we expected a bounce. The daily RSI was oversold. Do you see how all the puzzle pieces? Yeah, they come together. But it was a three-wave move.

[00:06:31]And Elliot wave tells us with a three-wave move up, don't expect this to rally to all-time highs. Surely, it can turn into a larger three-wave move, but would that really change anything? Not really. It might only lead to maybe a slightly greedy reading on the um fear and greed index.

[00:06:51]But yeah, I mean the structure should be clear. I just want to highlight here daily RSI is oversold. Want to explain what that means. If we go to the weekly chart, and this is interesting as well, the Bitcoin, hold on, let me zoom in.

[00:07:05]Bitcoin was oversold in February, and we might be on our way back into the oversold region here as well. And in 2022, the bare market formed the low when the weekly RSI was oversold. Now, okay. Um, I'm I'm not I'm not a huge fan of the weekly RSI. I I don't I find I don't find it works as well as the daily because Yeah. Also here we were oversold in February but has the bare market finished? I mean maybe but there's no evidence for it. So for me um I still follow the structure and the structure tells us that yeah just don't be surprised by a bounce if it happens.

[00:07:43]This would be our wave two from an Elliot wave point of view. But there is still plenty of room to the downside.

[00:07:50]Now do we have to get to 39K? No. 39K is just one of the targets, an ideal target, but obviously probabilities are dynamic.

[00:08:00]So, it's going to be there as a landmark as long as any bounce remains corrective in nature and as long as we hold resistance, we can focus on it. But of course, we're a huge um we're huge fans of looking at the market from a holistic point of view. So we're not only using Elliot wave. No, we use additional indicators like time cycles. I'm not going to go into time cycles today, but we also use some onchain indicators. So if we take a look at our MCO terminal, then we can look at some cost basis bands that are very interesting. They are partially they come from structure, price structure, but they are onchain indicators. So, let me walk you through them because they are interesting because they give us really interesting zones where maybe accumulation might make sense from an onchain point of view. What I just showed you were technical indicators, price data. This here is onchain. So, I'll show you three cost basis bands. They are not very well understood. Um, they're also not very popular, but maybe that is exactly what makes them interesting. We've got them integrated in our terminal. If you're interested in trying to work with this terminal, if you want to check it out, it's early access right now. Gold members get access at the moment. And if you want to join, you can find a link in the comment section. There's a link that gives you a 50% discount if you use the voucher code for the first month. And you can just check it out, see if it works. But the terminal is really only one element of our membership. Um the in my opinion even more significant part at least right now is still the Elliot wave anal an analysis daily updates intraday updates live charts and much more but one of the most misunderstood concepts yeah is is is the difference between these cost basis bands. So what I just want to show you is here the realized price and then we can also activate the balanced price. These are two bands which have historically been quite relevant. Hold on. Actually I wanted to show you the investor price not the balanced price. Um and they are two so we can make that larger. There are two cost basis bands that again they are not very well understood. Um if we talk about these two let's say we'll start with the with the realized price it's highlighted here in orange and then we've got the um investor price highlighted in I don't know is that blue or gray? Um, but the upper one is at 53K, the lower one at 49. So, it's it's a small corridor. I'm not saying that we have to uh necessarily hold this zone as support, but it's like if we zoom out historically, if we fell or whenever we fell below it, we fell below it in 2022, touched the lower one in 2020, fell below it in 2019, fell below it in 2015.

[00:10:56]The market does not spend much time there.

[00:10:58]So think of these as as different ways of estimating Bitcoin's fair value based on based on investor behavior. And the realized price is essentially the average price at which all Bitcoin last moved on chain. So instead of valuing every coin at today's market price, it values each coin at the price when it was last transacted. Or in simple terms, it it tells us the average cost basis of the Bitcoin network. And that's currently at around 53K.

[00:11:28]And look, this doesn't have to be support, but we will most likely, if I had to guess, you know, we'll likely go below it. That's also what Elliot wave tells us. And it's also what happened in previous bare markets. And um so historically, you know, when Bitcoin trades below the realized price, the average holder is sitting on an unrealized loss. And these periods have often coincided with bare market lows and major accumulation um opportunities.

[00:11:54]And then the investor price sits um below the realized price and it can be viewed as a lower estimate of the aggregate investor cost basis. So historically also here Bitcoin spending periods below the investor price has been really rare because it's lower than the realized price right but you know even here um it's often indicating capitulation.

[00:12:20]So look, if if you think about it, the investor price represents a discounted estimate of investor value. And when Bitcoin falls below the realized price, caution increases because the average investor is underwater. And then when Bitcoin approaches the investor price, which is below that, long-term value investors often start paying close attention. And currently, we are above these. And I made a video about this several weeks ago where I told you we have not triggered this indicator.

[00:12:48]Basically, this is a signal, right, that historically at least no bare market ended without breaking below the realized price. So that's why this is so interesting because we could easily break below it, spend maybe a few weeks there and then recover and go back into the next bull market. That is what I find so interesting about this. So I would say now that we've talked about the overall price structure, talked about this onchain indicator, let us also talk about the micro price action.

[00:13:19]So and this is the 15minute chart. So really the the micro price action here and you can see that Bitcoin has touched this structural support line I talked about in the beginning at around 62.7K.

[00:13:32]Uh broke slightly below it yesterday or today even recovered higher low but not a higher high yet. So, what I said earlier today in the um in the Bitcoin video, for those of you who watched it, the idea is that there could be um a bounce could basically happen at any point, right? You know, I'm not I'm not trying to predict where exactly because we are clearly in a bare market and an upside move is likely going to be only a corrective bounce. But what I showed you guys is we have a resistance zone which so far has been holding this. I'm not saying this has to hold. Again, this is a pivot or a decision zone. If the market can break above this first hurdle, which is between 64,187 and 67,487.

[00:14:19]If we break above this very first hurdle, it could be an indication that at least a larger bounce is starting, that at least a local low has formed, that we are starting the wave 2 bounce, and that we're moving higher into the upper resistance area, which I showed you in the beginning in wave two. I have shown here how a micro fivewave move up could look like in wave A of two. So if we get five waves up and the break above the first resistance, that's the best signal we can get. But that signal hasn't triggered. I mean, we're just consolidating even below the very first Fibonacci resistance, even below 64,187 right now. So this is what I'm watching for. If the market can generate these five waves, then this could represent the Awave of the wave 2. And then we can define support for the Bwave. Then it could be a C-wave rally. But really, this is likely only going to be a counter trend move. So, the pressure remains down. We're likely in the bare market. I talked about downside targets.

[00:15:18]I talked about um the similarities to the last cycle. And we're oversold. So, a decent bounce at some point seems likely, but um I would need to see a first micro fivewave move up or at least a break above resistance as an indication that a short-term at least a short-term shift in direction is underway. That's the update on Bitcoin.

[00:15:38]Hope it was helpful. Um, make sure to also uh subscribe to our newsletter if you're interested. I'll leave a link in the comment section for further updates.

[00:15:46]Thanks so much.