Bitcoin‘s bear market could soon reach a bottom if a well-known technical indicator repeats its historic pattern, according to trader Max Crypto. He pointed to the two-month stochastic relative strength index (stoch RSI), suggesting that when it approaches zero, a turnaround for the world’s largest cryptocurrency is likely.
Two-month stoch RSI in focus
Max Crypto, an active trader and commentator in the digital asset space, highlighted the classic stoch RSI indicator on X. He noted that whenever the two-month stoch RSI signals a bullish cross and dips to zero, Bitcoin tends to form a cycle low.
Every time the 2M Stoch RSI had a bullish cross and dropped to 0, $BTC bottomed, according to Max Crypto’s latest analysis.
Stoch RSI, a derivative of the traditional relative strength index, places more emphasis on recent momentum and is a widely watched technical tool among cryptocurrency traders.
Data from TradingView shows that the current two-month stoch RSI for Bitcoin stands at 4.81, after dropping into the “oversold” territory below 30 in March. These levels were last observed in early 2021.
Crypto traders have increasingly referenced stoch RSI readings this year as Bitcoin price action draws parallels to previous bear market phases, particularly in 2022.
In April, Quantum Ascend, another trader with a following in the industry, observed that Bitcoin’s price movements appeared to be “playing out nearly perfectly” based on historical RSI patterns.
Stoch RSI remains an important reference point for technical analysts who identify trend reversals and overbought or oversold conditions in major cryptocurrencies.
Mini dictionary: Stoch RSI, or stochastic relative strength index, is a technical indicator that applies the stochastic oscillator formula to RSI values rather than price data, offering traders a more responsive measure of momentum shifts within financial markets such as crypto assets.
| Indicator | Current Value | Status | Last Seen at This Level |
|---|---|---|---|
| Stoch RSI (2M) | 4.81 | Oversold | Early 2021 |
| RSI (Daily) | 15 (June) | Extremely oversold | 2015, 2018, 2022 |
RSI divergences and market outlook
While stoch RSI captures immediate market momentum, traders also continue to monitor the standard RSI for evidence of bullish signals. Bitcoin has held above the $60,000 threshold in recent sessions, and several market participants have discussed potential divergences with broader financial indices, including the S&P 500.
On Sunday, investor BitcoinHyper drew attention to a bullish divergence between Bitcoin and the S&P 500, suggesting a possible rebound in the near term. Market watchers note that daily RSI touched just 15 at the start of June—an occurrence seen only a handful of times in Bitcoin’s history.
Popular trader Osemka remarked that such extreme readings have only rarely failed to produce a sustained bottom. Recalling 2015, he said the last time a low RSI failed to break support, Bitcoin entered an accumulation phase instead of extending its downtrend.
There’s been one case where extreme $BTC RSI (1D at 15) failed to break the lows and only managed to sweep it. That was at the end of the accumulation range in 2015, Osemka explained.
Even so, Osemka warned that a deeper correction cannot be ruled out, as a more pronounced RSI pullback could signal a further slide before Bitcoin establishes a firm base.
Recent price gains, including Bitcoin’s recovery above $64,000 earlier this month, have coincided with bullish RSI divergences across several time frames, lending support to the view that technical indicators may continue to guide market direction.
