Bitcoin's Mid-November Capitulation: Panic Signal or Launchpad?

Bitcoin pulled a classic skit: the 14-day RSI dipped below 30 in mid-November (cue the alarms), price sits near $89,000, and one popular chart overlaid Bitcoin’s recent move with the average path after the last handful of RSI blows under 30 — a path that, on average, ended up near roughly $180,000 about 90 days later. Dramatic? Sure. Guaranteed? Not even close.

Why that RSI flash made traders spill their coffee

Quick recap without the jargon: an RSI under 30 is the market’s way of saying “yup, oversold.” Ten people in a room react ten ways. Historically, a few of these deep dips preceded violent rallies — hence that neat average path to ~180k. The math is simple: from about $89k to $180k is roughly a 105% jump in three months, which works out to about 0.8% compounded daily. Pretty numbers, but averages hide the messy stuff.

Event-study averages are helpful to notice patterns, not prophecy. The five prior examples that feed that chart didn’t all follow the same route — some were wild roller-coaster rallies, others were sleepy rebounds. Context matters: Bitcoin peaked around $126,223 in October and slid to a low near $80,697 on Nov. 21 — about a 36% pullback. Some cycle models flag drawdown bands in the ~35%–55% range and propose trough zones that roughly sit between about $82k and $57k if certain post-halving rhythms hold.

Flows and positioning are the practical fuel-check. Investors yanked a hefty $523 million from a major iShares Bitcoin trust on Nov. 19 as prices dipped under $90k, and net ETF inflows have been basically flat since. That tells you participation wasn’t screaming “buy!” at the bottom — at least not yet. On the derivatives side, dealer gamma and options positioning tend to cluster, and right now a lot of that activity is concentrated in roughly the $86k–$110k band. When hedges sit there, spot can get bounced around inside that range until a proper breakout or breakdown arrives.

Technical momentum softened after the panic: the 14-day RSI bounced back toward the low 40s after the sub-30 print, which screams “short-term relief” while still leaving the market fragile if selling resumes. And remember: an oversold reading can stay oversold for longer than your attention span.

Where this could go next — checkpoints and chill tactics

If you’re trying to decide whether this is the start of a rocket ride or just another hiccup, watch for confirmations rather than headlines. The big markers are: acceptance above old regime pivots (there’s a commonly watched balance point near about $106,400), steady positive ETF flows, and a spot exit from the options-driven $86k–$110k band with real follow-through. Without those, it’s more likely a bounce within a larger corrective phase.

Macro stuff matters too. One camp links cycle timing to public-debt refinancing and interest expense dynamics rather than to fixed halving calendars. Liquidity cues are everywhere: a central bank easing move plus roughly $40 billion per month in short-dated Treasury bill purchases (announced to ease year-end funding frictions) change the backdrop for risk assets. People also like to lag M2 liquidity by about three months when comparing it to Bitcoin; sometimes the shifted M2 line tracks price moves on the way up and sometimes it decouples on the way down. Translation: liquidity can help, but it’s not a magic on/off switch.

Two short rules of thumb floating around traders’ feeds: “Oversold signals in a bull market tend to be bullish; oversold signals in a bear market aren’t.” And the other — more optimistic — view: short-term oversolds can still morph into higher prices if liquidity and money flows improve, even if the climb is messy and dramatic.

Bottom line: the mid-November RSI breach and the Nov. 21 low are Inputs™ you should respect, but they don’t mean automatic fireworks. This setup is gated — confirmations (volume, flows, and a convincing move above structural pivots) matter far more than the single fact that the 14-day RSI flashed red.

At press time (9:49 pm UTC on Dec. 17, 2025): Bitcoin is the largest crypto by market cap, the price is down about 2.26% over the last 24 hours, market capitalization sits near $1.71 trillion with a 24-hour trading volume around $43.52 billion. The total crypto market is valued at about $2.9 trillion with a 24-hour volume near $113.91 billion, and Bitcoin dominance is roughly 59.13%.