Bitcoin lost about one-fifth of its value over the past 3 months and shows negative annual performance. Price structure relative to moving averages and monthly RSI help determine whether this remains a correction within the cycle or signals a deeper reversal.
TL;DR
This brief analyzes price dynamics over the past 3 months and year-over-year through the lens of monthly RSI. The logic: the magnitude of the drawdown itself does not define the regime - what matters is RSI's position relative to long-term averages, which historically separated corrections from bear markets.
Bitcoin Price Performance
BTC drawdown over the past 3 months reached -19.7% (-$21.5K), with negative annual performance: -10.5% (-$10.4K). Meanwhile, the short-term picture has stabilized: week +1.5%, month roughly flat (-0.5%). Average price over the past 3 months ($101.5K) and year ($101.8K) nearly coincide. This underscores that for most of the period the market traded above current levels, with the main weakness concentrated in the recent decline. A double-digit 3-month drawdown is significant but not anomalous for Bitcoin. What matters more than the correction itself is its structure: stabilization at current levels after a sharp decline indicates a pause/consolidation and an attempt to form a local base. Confirmation of support will come from holding the range on subsequent tests.
Bitcoin Monthly Price
Monthly RSI stands at 56.5 and has dropped below the 12M SMA (67.3) - momentum is weaker than its average values for the first time since 2022. RSI is now approximately two points away from the 4-year SMA (58.7). In the 2018 and 2022 cycles, RSI breaking below this level often accompanied transitions into deeper bearish phases. RSI provides context for interpreting the drawdown: the combination of double-digit decline and RSI dropping below the 4Y SMA has historically increased the probability of transitioning into a deeper bearish phase.
FAQ
Why is RSI more important than price itself for determining regime?
Price shows "what happened," RSI shows "how this affects trend structure." The same -20% drawdown can be a healthy correction or the start of a deep bear market. Context determines interpretation.
What levels to watch in Q1 2026?
For RSI, holding above 55–58 preserves the chance for recovery, a sustained move below 55 increases the risk of a deeper downward phase.
CONCLUSIONS
A 20% drawdown over 3 months and negative annual performance paint a picture of significant correction. What becomes decisive is monthly RSI positioning: the current 56.5 reading sits 2 points from the 4-year average (58.7), which historically served as the regime boundary. The next 1–2 months (Q1 2026) will show whether RSI holds above the long-term 55–58 boundary or the market transitions into a deeper decline phase.