RSI 30/70 Oversold Bounce — Disproof verdict

The most-taught oscillator rule in retail: "RSI under 30 means oversold — buy the bounce; over 70 means overbought — take profit."

Verdict: dead — grade F, 0 of 2 markets survived, tested on BTCUSDT from 2023-05-16 to 2026-08-30.

At zero cost: +5.0%
With real costs (15bps + 2bps slippage): +3.7%
Out-of-sample: -24.4%
Buy and hold over the same window: +190.9% (the strategy is 187.2 points behind buy and hold)

Rules tested

strategy "RSI 30/70 Oversold Bounce"  (long)
indicators:
  r = rsi(14)

entry: when r < 30
exit:  when r > 70
# fills next open · fees+slippage on · 70/30 OOS · deflated-Sharpe gate

How this was reconstructed

Literal: enter on any close with RSI(14) below 30, exit on the first close above 70. Entry is a level test rather than a cross, which is the more generous of the two readings taught.