Bitcoin just flashed a rare capitulation signal that historically triggers a violent rally

Bitcoin trades near $89,000 today after its 14-day relative strength index fell below 30 in mid-November, a threshold traders track for capitulation.

A chart circulated by Global Macro Investor’s Julien Bittel, sourced to LSEG Datastream, overlays Bitcoin’s recent path with the average trajectory that followed the last five RSI breaks below 30 and traces a route that ends near $180,000 about 90 days after the oversold print.

The $180,000 waypoint is return math. With Bitcoin near $89,000, reaching $180,000 would imply a roughly 105% gain in roughly three months, or about 0.80% compounded daily.

The chart isn’t a forecast distribution but an event-study average, meaning it can mask how different the paths were across those five historical instances.

Doomer evidence for the four year cycle and market top

Price action since October has kept the “cycle” argument active. Bitcoin set an October high at $126,223, then sold off into late November.

The decline reached a low near $80,697 on Nov. 21, a drawdown of about 36% from the October high.

That drop already sits inside the 35% to 55% drawdown band laid out in CryptoSlate’s cycle-timing framing, which mapped a trough zone of roughly $82,000 to $57,000 if the post-halving cadence remains the governing model.

Time is up: The case for why Bitcoin bear market cycle started at $126k

A second CryptoSlate analysis focused on $106,400 as a balance point that repeatedly flipped between support and resistance.

Bull or bear? Today’s $106k retest decided Bitcoin’s fate

Bitcoin has spent weeks below that level into mid-December, which matters for the RSI chart because a move toward $180,000 would almost certainly require acceptance above prior regime pivots rather than only a momentum bounce inside a corrective range.

Flows are a practical cross-check on whether the bounce thesis has fuel. Investors pulled a record $523 million from BlackRock’s iShares Bitcoin Trust (IBIT) on Nov. 19 as Bitcoin slipped below $90,000, and net ETF inflows have all but flatlined since.

Derivatives positioning adds another constraint: where the market is paying for optionality and where dealer hedging can keep spot in a band.

A CryptoSlate report on the options complex put dealer gamma concentration placed it in a broad $86,000 to $110,000 range, a range that can promote two-way trade as hedges are adjusted and can delay trend moves until spot exits with follow-through.

Bitcoin’s $55 billion options market is now obsessing over one specific date that forces a $100k showdown

Per Barchart’s technical dashboard, Bitcoin’s 14-day RSI has mean-reverted to around 40 after the mid-November sub-30 reading, which fits a bounce, while leaving the market sensitive to any renewed selling pressure if flows weaken again.

Is the 4-year cycle dead?

Bittel’s “four-year cycle is dead” claim rests on macro mechanics rather than halving calendars. He ties cycle timing to public-debt refinancing dynamics and the maturity profile of U.S. borrowing, then connects that to interest expense as a driver of policy and liquidity responses.

Federal Reserve Economic Data (FRED) tracks federal government interest payments as a line item in current expenditures, and, according to the Committee for a Responsible Federal Budget, interest on the debt is projected to exceed $1 trillion annually.

Liquidity conditions are also central to the 90-day window because the RSI chart’s horizon overlaps with macro lead-lag narratives that traders already use.

The Federal Reserve cut rates to a 3.50% to 3.75% range in December and also announced about $40 billion per month in short-dated Treasury bill purchases (plus reinvestments) aimed at calming year-end funding pressures.

A version of global M2 liquidity shifted by about 90 days is often plotted against Bitcoin to illustrate how liquidity impulses can precede risk-asset repricing, even though the relationship can decouple for long stretches.

My analysis of the M2 correlation, adjusted by exactly 84 days, concludes that during moves up, the M2 line tracks the Bitcoin price path. However, during a downswing, M2 keeps grinding higher while the price diverges.

The counterweight is that RSI can remain extreme and still fail to mark a lasting low.

In practice, that turns the $180,000 path into a gated setup where confirmations matter more than the fact of an RSI breach.

CheckpointLevel or metricHow it is being usedStarting level~$87,800 (Dec. 17)Base for the 90-day return mathEvent trigger14-day RSI below 30 (mid-Nov.)Defines t=0 for the RSI event windowChart target~$180,000 by about +90 daysImplied move of ~+105%Regime pivot$106,400Reclaim and hold to shift from bounce to trendDealer band$86,000 to $110,000Acceptance outside the band to reduce range-trade pressureFlow stress marker~-$523M IBIT day (Nov. 19)Benchmark for risk-off flow shocks (per Reuters, Farside Investors)Cycle drawdown band$82,000 to $57,000 zoneArea mapped from the $126,223 peak in the cycle-valid framework

Bitcoin has already produced the inputs this debate relies on: the mid-November RSI break, and the Nov. 21 low near $80,697, leaving $106,400 and daily spot ETF flows as the clearest markers for whether the rebound remains a bounce or extends toward the chart’s $180,000 path.

Still, analyst Caleb Franzen recently made a point that’s worth considering,

Oversold readings in bull markets are bullish.

Oversold readings in bear markets aren’t bullish.

Meanwhile, others, like MilkRoad, agree with Bittel,

“Short term oversold signals have to be interpreted inside the liquidity and business cycle.

If conditions keep improving and money keeps flowing back into markets, these oversold dips tend to work higher over time, even if it’s messy along the way[…] We will go higher.”