The first time this happened was in 2018. Back then, the RSI dropped below 30, and BTC traded at around $3,200. Two years later, BTC hit a new all-time high at around $67,000, yielding a 2,088% return.
Meanwhile, the latest of these RSI signals came through in June 2022, right before FTX collapsed. Interest rates were high at that point, but macroeconomic conditions started to improve.
Initially, BTC dipped from $18,000 and $16,000 after the RSI crossed the 30 mark. However, a clear bullish divergence emerged back then, as the oscillator kept rising even though the price was dropping.
Fast forward two years and four months later, BTC yielded a 563% return after peaking at its current all-time high of $126,000.
How High Can BTC Go This Time?
We are currently at that same spot where the RSI touched 30 and is now rising above the 14-period moving average.
This has been quite a profitable buy signal in the past, and although we might not get the same returns as the last two times, as BTC has grown much bigger in terms of market cap, this seems like an attractive time to buy for long-term investors.
In addition, the price just tagged the 200-week exponential moving average (EMA), which has also acted as a strong support multiple times during previous bearish cycles.
How much could BTC yield this time? We envision a potential long-term rally to $150,000 in the mid-term and $200,000 over the next three years if this turns out to be the end of this latest bearish cycle.
A Second Buy Signal Could Be About to Pop Up in the Daily Chart
Heading to the daily chart, we are keeping a close eye on Bitcoin’s behavior at this $77,000 level, as this is a key resistance area from which the top crypto has retreated strongly in the past.