Bitcoin Shows Bullish Divergence, Analysts Predict Reversal

Bitcoin is currently exhibiting technical indicators that have historically preceded bullish reversals, according to a widely followed crypto analyst. Rekt Capital, a pseudonymous analyst with a significant following, has noted that Bitcoin is displaying bullish divergence with the relative strength index (RSI). This phenomenon occurs when the RSI trends higher while the price moves lower or sideways, suggesting an impending price reversal.

Rekt Capital highlighted that similar bullish divergences have occurred in the past, specifically in August 2024, August 2023, and November 2022. Each of these instances was followed by a reversal to the upside, indicating a potential for a similar outcome in the current market conditions. The analyst pointed out that Bitcoin is forming a higher low on the RSI while creating lower lows on the price chart, a pattern that has historically preceded bullish movements.

According to Rekt Capital, the downward trend of Bitcoin will be officially broken once there is a clean break above the lower high structure, currently around $82,000. The analyst noted that Bitcoin has successfully retested the support level and that the daily RSI higher low continues to hold. This suggests a maturing bullish divergence, with the price just below the key price downtrend line. For the bullish divergence to play out, Bitcoin needs to break above this downtrend line.

At the time of writing, Bitcoin is trading at $84,789, slightly above Rekt Capital’s downward trend line, indicating that the reversal may already be underway. The analyst's observations suggest that Bitcoin is on the cusp of a significant bullish move, supported by the technical indicators and historical patterns.

Another analyst, BTCEarth, has also noted that Bitcoin is currently trading within a falling wedge pattern. This pattern is characterized by a narrowing price range, with Line D serving as the support base and Line E marking the descending resistance. The price action has continued to compress within this structure, signaling an imminent breakout. A confirmed move above Line E, sustained over multiple daily candle closes, would validate the pattern and confirm a bullish reversal. Such a breakout could set the stage for a stronger upward trend as traders recognize the shift in market structure.

Ask Aime: What technical indicators and historical patterns suggest a potential bullish reversal in Bitcoin's price?

BTCEarth emphasized that the accumulation zone between $74,000 and $75,000 remains intact, offering a favorable risk-reward setup for long positions. The immediate resistance lies at $80,000, with further resistance found between $86,000 and $88,000, an area of historical consolidation and heavy volume. A breakout above this zone would significantly strengthen Bitcoin. Beyond that, the major horizontal resistance near $100,000 remains the ultimate target. This level represents a psychological milestone and a crucial technical threshold. If Bitcoin builds enough momentum to clear it, it could pave the way for a fresh leg up in the long-term bullish cycle.

In conclusion, Bitcoin is currently on track toward a decisive test zone between $96,200 and $102,100. The price structure suggests a potential bottom formation, with a breakout above Line E potentially sparking a powerful bullish move toward the $88,000–$100,000 range. However, until this breakout occurs, caution remains crucial, and maintaining a hold strategy is advised. The technical indicators and historical patterns suggest that Bitcoin is poised for a significant bullish reversal, but traders should remain vigilant and prepared for potential market volatility.