Bitcoin has recently exhibited a hidden bullish divergence on its weekly chart, a development highlighted by market analyst TATrader_Alan. This technical pattern is apparent on the Relative Strength Index (RSI) and suggests a noteworthy shift: despite a decline in Bitcoin“s price, the underlying momentum appears to be strengthening. Such a scenario typically serves as a precursor for a potential trend reversal.
Hidden bullish divergences occur when the price of an asset makes lower lows while the RSI indicates higher lows. This phenomenon can be interpreted as a sign that the selling pressure is diminishing. In the current situation, Bitcoin“s RSI demonstrates increasing bullish momentum, even as the price continues to dip. Historical data indicates that this kind of setup often precedes a price rebound.
The behavior of the RSI supports this bullish signal, consistently forming higher lows while Bitcoin stabilizes around its support zones. If this pattern follows its historical trajectory, there is a potential for Bitcoin to initiate a significant upward movement, possibly revisiting resistance levels seen in previous market cycles.
This hidden bullish divergence on the weekly timeframe could signify the onset of a price reversal for Bitcoin. Should the signal validate, it may lead to tests of crucial resistance levels, which could ultimately shift market sentiment and attract additional buyers into the fold.
