$MU Contract · Why you can’t buy when RSI drops to 20? The truth about “oversold”
Many people see RSI=20 and think: it’s oversold, so it should bounce.
But that logic is wrong in a trending market.
【The essence of RSI】
RSI (Relative Strength Index) = measures the proportion of upward gains within a given period relative to total volatility
RSI > 70: overbought zone (rising too fast, may pull back)
RSI < 30: oversold zone (falling too fast, may rebound)
RSI < 20: extremely oversold (historically very low)
It sounds like RSI=20 really should be a buy.
But there’s one assumption you weren’t told:
In a downtrend, the oversold zone can last a very long time.
【MU’s current RSI situation】
4H RSI: 20.9 / 24.9 / 31.0
→ All three periods are in the oversold zone!
This is already multiple consecutive 4H candles with RSI < 25.
Comparable reference:
Last week, SNDK’s RSI_4H also broke below 25.
At the time, many people tried to bottom-fish.
Then it kept falling.
【What is the real bottom signal?】
RSI bullish divergence ≠ RSI oversold
Definition of bullish divergence:
First low point: RSI=22, price=$750
Second low point: price=$700 (lower), but RSI=28 (actually higher)
This kind of divergence—“price makes a new low, but RSI does not”—is the true bottom signal.
Current MU: bullish divergence ❌ not成立 (price low $706, RSI is also moving downward)
Conclusion: RSI=20 only shows how badly it’s fallen; it doesn’t mean the drop is over.
Wait for bullish divergence to appear, then discuss entry.
Technical indicator explanation, not investment advice.
#MU #RSI #底背离 #Technical Analysis