Extreme overbought readings can more often than not be bullish, based on the ETF’s trading history After the Grayscale Bitcoin Trust ETF’s historic spike to new highs, it would be natural for investors to get spooked by a bearish daily chart pattern on the day after its most extreme “overbought” reading in more than six years.

The exchange-traded fund’s GBTC trading history — going back about nine years, well before it converted to a spot bitcoin ETF — shows that being really overbought is much more a sign of its bullish ability than a warning of an impending correction. But what might make this time different is the “bearing engulfing” pattern that appeared on Tuesday.

Before Grayscale Bitcoin Trust’s 8.5% selloff in afternoon trading Tuesday, it had soared 32.4% amid a six-day win streak to close Monday at a record high.

Chart watchers try to put a rally like that in historical perspective by tracking the relative strength index (RSI), a momentum indicator that measures the relative magnitude of recent gains and losses.

RSI readings above 70.00 are viewed by many as signaling an overbought condition — which suggests the charted instrument has moved up so fast relative to historical trading patterns that a pause or a pullback may be needed to allow bulls to catch their breath.

In Grayscale Bitcoin Trust’s case, the recent rally had lifted its RSI to an extreme overbought reading of 87.12 on Monday, before falling to 70.44 on Tuesday.

Monday’s RSI close was the highest seen for the ETF since it peaked at 88.01 on Dec. 18, 2017, when its price closed at a then-record high of $38.05. The fund plummeted 89.9% over the next year, to close Dec. 14, 2018 at $3.84.

That does seem daunting for investors. But Frank Cappelleri, technical analyst at CappThesis LLC, said that rather than caring about the last time the RSI was so high, he’s more concerned with “the first time” the measure rose above 85 before the ETF peaked.

“And as is clear, the indicator first surpassed 85 back in November 2015, which means [the ETF] had two more years before topping out,” Cappelleri wrote in a note to clients.

That first time was a 91.06 close on Nov. 14, 2015. While there were no closes above 85 in 2016, there were nine others in 2017 before that final reading on Dec. 18.