Data shows that the 14-day Relative Strength Index (RSI) of $BTC has fallen into oversold territory. Analyst Axel Adler Jr, in a new post on X, discussed the recent trend of Bitcoin's RSI. The 'RSI' is a technical analysis indicator that measures the speed and magnitude of price changes of an asset over a specific period, which in this case is 14 days. This indicator is generally used to identify oversold or overbought conditions of an asset. When the RSI is above 70, it may indicate that the price is heating up and there could be a downward correction. On the other hand, being below 30 may imply that the asset is underbought.

As shown in the chart shared by the analyst, Bitcoin's 14-day RSI has recently plummeted and is now below the 30 threshold. This suggests that the cryptocurrency is becoming oversold, at least from this indicator's perspective. 'Other metrics are also showing alerts,' notes Adler Jr. 'I think all the conditions are now in place to start testing the ATH.' However, although optimistic developments may have occurred in the RSI and other indicators, the $BTC has indeed dropped in the last day.

On-chain data can provide clues about where the next potential support zone may be located for the asset. As revealed by the analysis company Glassnode in its latest weekly report, the average cost of short-term holders is located at $97,100. Short-term holders (STHs) refer to Bitcoin investors who bought their coins in the last 155 days. The cost basis of this group has often been a relevant level for the cryptocurrency, alternating between support and resistance.

In the chart, the analysis company also showed two other levels: the standard deviation bands +1 and -1. Currently, the latter is situated at $83,200, so it is possible that if the BTC downtrend lasts long enough to push it below the STH cost basis, this value could prove significant. However, before this level, there is another on-chain level that may be important. The level in question is part of the Spent Supply Distribution Quantile (SSD) model, which basically tells us at which price levels investors who are selling their coins now originally bought them. The 0.85 quantile is located at $95,600, which is quite close to the STH cost basis, so a retest of the zone could be particularly vital for Bitcoin.

At the time of writing, the price of $BTC is around $101,000, down nearly 5% in the last seven days.