Bitcoin Oversold on Weekly Price Chart for First Time in Four Years

A key long-term bitcoin price indicator is reporting oversold conditions for the first time in almost four years.

An asset or a cryptocurrency is considered to be oversold if the RSI is holding below 30.00.

That's not necessarily true as some markets enter into very strong trends, in which case the RSI can stay oversold or overbought for prolonged periods of times.

A strong bounce could remain elusive for some time, despite the oversold readings on the 14-week RSI. As of writing, BTC is trading at $3,390 on Bitstamp, representing a 2.3 percent drop on a 24-hour basis.

The RSI dropped below the key support of 53.00 on the weekly chart in late January, signaling a bullish-to-bearish trend change.

As of now, it's holding in oversold territory below 30.00.

It is worth noting that RSI's January 2015 drop below 30.00 was short-lived and BTC soon picked up a bid in response to the oversold conditions.

BTC failed to cut through the diagonal resistance yesterday, adding credence to the bearish setup on the 3-day chart.

That support may hold ground, as the 14-week RSI is signaling oversold conditions for the first time since January 2015.

A break below the 200-week MA would bolster the bearish setup seen in the 3-day chart and open the doors to $2,972.