Bitcoin Shows Bullish Divergence Signal, 50% Price Surge Possible

Bitcoin has been trading within a narrow price range after failing to surpass $110,000 earlier this month. The cryptocurrency has been fluctuating around $105,000, with neither bulls nor bears gaining significant control. Despite this consolidation, a notable technical signal has emerged on the 4-hour chart, suggesting a potential move to a new all-time high.

Crypto analyst Luca highlighted a bullish divergence pattern on Bitcoin’s 4-hour chart, which previously appeared in early April and preceded the rally that reached the May 22 all-time high of $111,800. This pattern, characterized by price forming lower lows while the Relative Strength Index (RSI) prints higher lows, indicates that selling momentum is waning and a reversal to the upside could be imminent. The previous instance of this pattern led to a sharp price increase from $74,000 to above $111,000 within a few weeks.

Bullish divergences on mid-timeframe charts like the 4-hour are often the first signals of a reversal, especially when supported by rising volume. The current pattern suggests that the recent retracement from $111,800 may have run its course. With the RSI trending upward despite slight price declines, Bitcoin could be in another hidden accumulation phase before its next upward move. If this pattern holds true to its previous performance, Bitcoin could be poised for another push toward new all-time high levels, potentially surpassing the previous $111,800 high.

Although Bitcoin’s price is currently stable, the presence of this bullish divergence serves as a reminder of how quickly market conditions can change. The previous bullish divergence resulted in a 50% price surge. A similar performance from the current price level could see Bitcoin targeting levels above $160,000. At the time of writing, Bitcoin is trading at $105,700, up by 1.4% in the past 24 hours, already showing signs of the bullish divergence signal coming into action.