Bitcoin Oversold Level Hits New High Since 2020 Pandemic Crash, Analysis Suggests Potential for a $70,000 Technical Rebound

BlockBeats News, June 6th: After a drop of about 30% in the past month, Bitcoin's daily Relative Strength Index (RSI) has dropped to around 15.5, hitting the lowest level since the market crash triggered by the March 2020 pandemic, indicating the market has entered a severely oversold condition.

Analysis pointed out that similar levels were seen during the 2020 pandemic crash and the February 2026 correction, after which Bitcoin saw rebounds of about 50% and 30% respectively. Currently, the bulls are still holding the key support level at $60,000. If this level continues to hold, Bitcoin is likely to stage a technical rebound towards the area around $70,650 where the 20-day EMA moving average is located in the coming weeks; if it drops below $60,000, it may further test the mid $50,000 range.

Bitcoin's short-term holders have seen their profit/loss ratio fall to a historic low, indicating that a large number of recent buyers are exiting at a loss, and market sentiment is nearing panic. Crypto analyst Scott Melker stated that about 5.3 million Bitcoins held long-term are currently at an unrealized loss, a scale higher than during the FTX collapse and reaching the highest level since the pandemic crash in 2020.

Melker mentioned that market sentiment is highly synchronized with price trends, with traders being extremely optimistic at the May peak and reaching a state of extreme pessimism on June 3rd, stating, "Usually, this means the bottom is not far away, but that's just usually."