Bitcoin’s weekly relative strength index (RSI) has rebounded above 34 on Monday, marking only the second time the cryptocurrency has flashed a bullish divergence pattern on record. The signal emerges as BTC price continues to decline, creating a technical setup where momentum indicators diverge from price action.
The previous bullish divergence occurred in November 2022 following the FTX crash, when Bitcoin’s RSI bottomed while price fell to around $15,500. That divergence preceded a 755% rally that carried BTC to a record high near $126,200.
Bitcoin’s current price has dropped to $63,000 from $75,770, placing it below the 200-week simple moving average (SMA) at $62,000. The 200-week SMA has historically acted as a bottom zone at the end of bear markets in 2015, 2018, and 2020.
Michael van de Poppë, an analyst tracking the pattern, described the current price zone as an “ideal area to accumulate.” He outlined a potential path for further upside if key resistance levels break. “If that breaks, there’s nothing stopping Bitcoin from running all the way towards $71,500-73,000 and potentially even as high as the CME gap at $79,000,” van de Poppë said, referring to the $64,000-65,000 zone that bulls must overcome.
The analyst identified a 50-week SMA target at $91,755 and a next resistance zone near $90,000 if momentum continues higher.
However, Bitcoin remains in the breakdown stage of a weekly bear flag pattern, which formed after price rebounded inside a rising parallel channel following the sharp decline. The bear flag’s measured target sits below $50,000, presenting significant downside risk if the pattern completes. Bitcoin has already slipped below the bear flag channel, similar to its 2022 symmetrical triangle breakdown.
The divergence pattern suggests potential upside, while the active bear flag indicates downside vulnerability. Both technical structures are currently in play, creating conflicting signals for traders navigating the current market environment.
