Bitcoin Slides 20% In Three Months, RSI Signals Critical Phase For Market Direction
In Brief
Analyst Axel Adler Jr. says Bitcoin’s roughly 20% three-month drop and weakening RSI near key long-term levels make the next few months critical in determining whether the move is a normal correction or the start of a deeper downtrend.
Cryptocurrency analyst Axel Adler Jr. provided an overview of Bitcoin’s recent performance and its near-term outlook, highlighting both price movements and technical indicators.
According to Axel Adler Jr., Bitcoin has lost roughly one-fifth of its value over the past three months and shows a negative year-to-date performance. Evaluating the price structure relative to moving averages and the monthly Relative Strength Index (RSI) helps determine whether the recent decline is a typical cycle correction or signals a more prolonged downturn.
Axel Adler Jr. examined Bitcoin’s price dynamics over the past three months and year-over-year through the lens of monthly RSI, noting that the magnitude of a drawdown alone does not define the market regime. Instead, the RSI’s position relative to long-term averages historically differentiates corrections from bear markets.
Over the past three months, Bitcoin’s drawdown reached -19.7% (approximately -$21.5K), while annual performance was -10.5% (-$10.4K). In the short term, price action has stabilized, with weekly gains of 1.5% and monthly changes near flat at -0.5%. The three-month average price ($101.5K) and one-year average ($101.8K) are nearly identical, reflecting that most of the period traded above current levels, with recent weakness concentrated in the latest decline. While a double-digit three-month drop is notable, it is not unusual for Bitcoin.
Axel Adler Jr. emphasized that the structure of the correction is more important than the absolute decline, as stabilization at current levels after a sharp fall suggests consolidation and the formation of a potential local base. Confirmation of support will depend on subsequent tests of this range.
The monthly RSI currently stands at 56.5, having fallen below the 12-month simple moving average (SMA) of 67.3, indicating weaker momentum than average for the first time since 2022. The RSI is approximately two points below the four-year SMA (58.7), a level that in past cycles, including 2018 and 2022, has often coincided with deeper bearish phases.
Axel Adler Jr. highlighted that the RSI provides context for interpreting drawdowns: a combination of a double-digit decline and RSI dropping below the four-year SMA historically increases the probability of a transition into a more pronounced downward trend.
The analyst stressed that RSI is more informative than price alone for assessing market regime, as price reflects historical movements while RSI indicates the impact on trend structure. A similar -20% drawdown can represent a healthy correction or the onset of a deeper bear market, depending on context. For the first quarter of 2026, key RSI levels to monitor are 55–58: holding above this range preserves the potential for recovery, whereas a sustained move below 55 could increase the likelihood of a more significant downward phase.
Bitcoin’s 20% Three-Month Pullback Puts Focus On RSI As Early-2026 Market Direction Comes Into View
A three-month decline of approximately 20% combined with negative annual performance reflects a substantial market correction. The key factor now is the positioning of the monthly Relative Strength Index, which currently stands at 56.5, about two points below the four-year average of 58.7, a level that has historically marked the boundary between different market regimes. The coming one to two months in early 2026 are expected to clarify whether the RSI can remain within the long-term support zone of 55–58 or whether the market will shift into a more pronounced downward phase.
At the time of reporting, Bitcoin is trading at $87,452, showing a gain of more than 0.34% over the previous 24 hours. During this period, the price reached a low of $86,575 and a high of $87,936. The total cryptocurrency market capitalization stands at $2.95 trillion, reflecting a 0.22% daily increase. Meanwhile, total trading volume across the crypto market over the past 24 hours is $66.44 billion, representing a decline of 27.47%, based on data from CoinMarketCap.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
