BTC is nearing oversold conditions, as indicated by its RSI, even though its price remains over $40,000. Analyst Matthew Hyland highlighted on January 14 that Bitcoin's RSI has reached its lowest point since September, echoing the levels when BTC was priced around $25,000.

Despite a 15% decline following the launch of the U.S.'s first spot Bitcoin ETFs, Bitcoin has struggled to regain momentum. The RSI, a key momentum oscillator, dropped to 42.7/100 on daily charts, the lowest in four months, according to data from Cointelegraph Markets Pro and TradingView. This dip, noticed by Hyland, suggests a possible hidden bearish divergence, as the RSI makes lower lows while Bitcoin's price makes higher lows.

However, the daily RSI doesn't guarantee an immediate recovery in Bitcoin's price strength. Currently below the neutral midpoint of 50/100, the next significant level for the RSI to test is the 30/100 mark, indicating an "oversold" condition. Trader and social media commentator Seth expressed interest in seeing Bitcoin's daily RSI reach this oversold territory.

On hourly charts, the RSI briefly dipped below 30/100 twice this week, each time recovering and forming higher lows. This fluctuation reflects a return of volatility in the market. Another indicator, the Bollinger Bands, shows Bitcoin's price near the lower boundary of an expanding channel, a situation not seen since mid-September. This suggests that the market is re-entering a volatile phase after a period of relative stability.

Cointelegraph