Bitcoin's Bullish Reversal: Hidden Divergence and ETF Inflows Signal a New Cycle

Bitcoin's price action in 2025 has sparked renewed optimism among analysts, with technical and macroeconomic signals converging to suggest a potential bullish reversal. A critical development is the emergence of a hidden bullish divergence on the weekly timeframe, a pattern historically associated with sustained uptrends. Simultaneously, surging inflows into U.S. spot Bitcoin ETFs—now outpacing 2024 levels—underscore growing institutional demand. Together, these factors paint a compelling case for Bitcoin's continued ascent.

Technical Indicators: A Confluence of Bullish Signals

A hidden bullish divergence occurs when an asset forms higher lows in price while an oscillator like the RSI forms lower lows. This pattern, observed in Bitcoin's weekly chart, indicates strong underlying buying pressure despite temporary correctionsExpert Shares 5 Key Indicators Suggesting Bitcoin Bull Cycle Is Still On^[1]. For instance, Bitcoin's 23% pullback from its January 20 high saw the RSI form a lower low, reinforcing the divergenceExpert Shares 5 Key Indicators Suggesting Bitcoin Bull Cycle Is Still On^[1].

The Stochastic RSI, a momentum indicator, is currently in oversold territory, a condition often preceding price reboundsExpert Shares 5 Key Indicators Suggesting Bitcoin Bull Cycle Is Still On^[1]. Historical backtests of similar RSI-oversold strategies show that while such signals can capture profitable rebounds, they often come with modest risk-adjusted returns and high drawdowns[^backtest>.

Additionally, Bitcoin's price near the 1.618 Fibonacci retracement level—a historically significant reversal point—adds to the technical narrativeExpert Shares 5 Key Indicators Suggesting Bitcoin Bull Cycle Is Still On^[1].

Phillip Swift's Pi Cycle Indicator, which has historically predicted Bitcoin's tops with high accuracy, further supports the bullish case. The indicator signals a top when the 111-day moving average crosses the 350-day moving average x2 (350DMA x2). As of September 2025, these moving averages remain widely separated, confirming Bitcoin's ongoing uptrendBitcoin ETF Flows^[3].

U.S. Spot Bitcoin ETFs: A Catalyst for Institutional Demand

The surge in U.S. spot Bitcoin ETF inflows has been a game-changer for the asset's institutional adoption. Year-to-date net inflows in 2025 have reached $14.8 billion, far exceeding 2024's figuresBitcoin ETF Inflows For 2025 Now Outpace 2024^[2]. By September 2025, ETFs added $976.2 million in BTC over just 10 days, reflecting sustained investor confidenceBitcoin ETF Flows^[3].

BlackRock's iShares Bitcoin Trust (IBIT) has led this trend, amassing $87.7 billion in assets under management by August 2025Bitcoin ETFs: $48B Projected Inflows for 2025^[5]. Cumulative inflows for U.S. listed Bitcoin ETFs surpassed $40.6 billion in early February 2025, with a 175% year-over-year increase in the first three weeks of the yearExpert Shares 5 Key Indicators Suggesting Bitcoin Bull Cycle Is Still On^[1]. These inflows have directly correlated with Bitcoin's price action, as ETF-driven demand has pushed the asset to record highsUS Bitcoin ETFs Reach $50B Milestone^[4].

Macro and Psychological Factors: A Perfect Storm

Beyond technical and institutional factors, Bitcoin's bullish case is bolstered by macroeconomic conditions and investor sentiment. The Fear and Greed Index (FGI) plummeted to 10 on February 27, a historically oversold level that has preceded major market bottoms in the pastExpert Shares 5 Key Indicators Suggesting Bitcoin Bull Cycle Is Still On^[1]. This extreme fear among retail investors contrasts with the growing institutional embrace of Bitcoin, creating a fertile environment for a reversal.

Conclusion: A Bull Cycle Reinforced

The interplay of technical divergence, robust ETF inflows, and favorable macroeconomic conditions suggests Bitcoin is in the early stages of a new bull cycle. While risks remain—such as regulatory shifts or macroeconomic volatility—the current data points to a market primed for a sustained uptrend. Investors should closely monitor the Pi Cycle Indicator and ETF flows for further confirmation, but the confluence of signals makes a compelling case for optimism.