Trader: Bitcoin bear market ends when 2-month Stoch RSI hits zero

Trader Max Crypto forecasts an end to Bitcoin’s bear market when the two-month stochastic relative strength index (Stoch RSI) falls to zero. The trader referenced prior cycle lows in 2014, 2018 and 2022 and posted the prediction on X. “Every time the 2M Stoch RSI had a bullish cross and dropped to 0, $BTC bottomed,” he wrote.

Stoch RSI is a variation of the standard relative strength index that places more weight on recent price changes and is used to identify overbought or oversold conditions. On a two-month chart the indicator recently measured about 4.81 after moving into the sub-30 oversold zone in March. Those readings were last seen a little over three years ago.

Other market participants are watching traditional RSI levels for related signals as Bitcoin trades above $60,000. At the start of June the daily RSI fell to roughly 15. Trader Osemka described that reading as one of a small number of “extremely powerful selling events” and referenced a prior instance in 2015 when an extreme RSI reading swept lows without breaking them.

Bitcoin returned above $64,000 this month following bullish RSI divergences on multiple timeframes. Trader BitcoinHyper identified a bullish divergence between Bitcoin and the S&P 500 as an additional technical note.

Chart analysts say stochastic indicators are not standalone signals and are typically interpreted together with price action and volume. The two-month timeframe smooths short-term moves and highlights longer cycles, which is why some traders use multi-month Stoch RSI readings when discussing macro cycle lows.

Historical data show extended price declines in Bitcoin have often coincided with deeply oversold RSI readings. Market participants point to repetitions of oversold readings as one way to mark cycle lows, while also noting that prior patterns do not guarantee future outcomes and extreme readings have at times failed to produce immediate price reversals.