- Bitcoin’s RSI divergence suggests a potential reversal with price at key support levels.
- The RSI increase points to weakening bearish momentum, signaling a possible bullish trend shift.
- Bitcoin’s price decline coincides with RSI divergence, indicating a potential breakout.
Bitcoin is showing early signs of a potential reversal after forming a bullish divergence on the daily timeframe. The Relative Strength Index (RSI) increased while Bitcoin’s price dropped below $82,000. This technical pattern signals weakening downside momentum, suggesting the market could shift direction soon. BTC continues to trade near $76,000 after falling sharply from $88,300 earlier this month.
RSI Signals Possible Reversal
The RSI, currently near 34.94, climbed upward even as Bitcoin made lower lows on the daily chart. This divergence between price and momentum indicates a possible shift from bearish to bullish momentum. Historically, this setup often leads to a trend reversal.
Moreover, divergence is typically a key signal for traders tracking market strength. RSI values under 40 generally reflect oversold conditions. Consequently, upward RSI movement at low price levels often precedes recovery in Bitcoin’s trend.
Additionally, the divergence appeared as BTC tested key support levels, intensifying attention on this signal. Price dropped from $88.3K to $82.2K, removing over $300 million in long positions. This decline has heightened the need for reliable indicators, and RSI divergence is one of the most watched.
Price Movement Stays Below Downtrend Line
Bitcoin continues to move within a descending channel, with lower highs forming under a declining resistance trendline. Despite the RSI divergence, price remains under the downtrend line, creating a crucial technical barrier. Until that line is broken, the short-term trend remains bearish.
However, the bullish RSI divergence suggests internal weakness in the downward move. This divergence has developed over several weeks, increasing its reliability. If Bitcoin breaks above the resistance trendline, it could confirm the reversal signal.
Besides, traders are closely watching the $80K level, where the price briefly rebounded before facing rejection. Hence, momentum indicators such as RSI are being closely observed to detect any breakout attempts. A daily close above the trendline would attract more interest in this signal.
Will Bitcoin Hold Above the 70K Zone?
As Bitcoin trades near $76,000, some traders argue it must test $71,000 before confirming the bottom. However, the bullish divergence could invalidate this expectation. With price making new lows while RSI climbs, the setup grows stronger daily.
Moreover, the divergence forms amid declining volume, another sign of seller exhaustion. Consequently, attention now turns to whether Bitcoin can reclaim the $80K level and break trend resistance. Price behavior in the coming days will be key in determining Bitcoin’s next direction.
Besides, technical setups like this often attract interest from swing traders looking for early entry signals. Hence, this divergence could lead to a shift in market dynamics. The next few sessions could decide whether Bitcoin reverses course or extends its decline further.
