Bitcoin momentum gauge hints at recovery. Experts remain cautious.

Bitcoin and the broader crypto market steadied Wednesday from Tuesday’s slide after Strategy (MSTR), the largest publicly listed bitcoin holder, sold a small portion of its stash and spot ETFs extended a record run of net outflows.

The cryptocurrency’s 14-day RSI has dropped below 30, a textbook oversold reading. The indicator measures the speed and magnitude of price movement over a two-week period.

While a reading below 30 suggests bearish momentum is dominant, analysts often read this as a sign that the selloff has been too rapid and could stall, allowing for a recovery. While not guaranteed, it’s a stance that has played out several times.

Oversold readings in early February, November 2025, late February 2025, and August 2024 marked interim or major price bottoms. So there are hopes the selloff may soon ease.

Some analysts are more cautious. “Blood is in the water, trade accordingly,” Monarq Asset Management said in a Telegram chat.

“With the long‑anticipated regulatory clarity from the CLARITY Act looking less likely every day (Jamie Dimon openly hostile, pulling no punches, using DC clout to position against it), value and speculative buyers are stepping back and looking for the long‑term, long‑anticipated capitulation move,” Monarq CIO Sam Gaer told CoinDesk.

According to Gaer, $60,000 is back in focus and a break below that level could trigger a sell‑off to as low as $45,000, as forecast by the theory that the $BTC price follows a four‑year cycle.

QCP Capital noted a spike in $BTC implied volatility, saying the message is less “buy the dip” and more “please insure the dip before discussing it.”

Broadly speaking, weakening institutional and corporate bids and Fed rate‑hike concerns limit the scope for a sustainable recovery even as the RSI hints at a potential bounce. According to QCP, $BTC needs to hold above $67,000 to restore bullish sentiment. Stay alert!