- Bitcoin’s price was down by more than 2% in the last seven days.
- Market indicators looked bullish, but selling pressure remained high.
Bitcoin [BTC] has somewhat remained dormant over the last few days as it continued to remain under the $42,000 mark. Though this looked concerning for investors, a bullish divergence has emerged on the coin’s price chart.
Bullish divergence spotted on Bitcoin’s chart!
Bitcoin investors bore losses last week as the king of cryptos price dropped by more than 2% in the last seven days. According to CoinMarketCap, at the time of writing, BTC was trading at $41,592.53 with a market capitalization of over $815 billion.
Meanwhile, a key BTC market indicator flagged a bullish divergence. Trader Tradingrade, a popular crypto analyst, posted a tweet on 19th January highlighting the same.
As per the tweet, BTC’s daily high-low chart flagged a hidden bullish divergence in the Relative Strength Index (RSI) that has been formed since December 2023.
On #Bitcoin daily high-low chart, Hidden Bullish Divergence in RSI has been formed since Dec 2023.
This may indicate a higher possibility of uptrend continuation in a head of time.pic.twitter.com/jPWGXO8X5J
— Trader Tardigrade (@TATrader_Alan) January 18, 2024
The analyst also mentioned that this would suggest a greater likelihood of an early-period price uptrend.
Therefore, AMBCrypto examined Bitcoin’s daily chart to find other such bullish divergences. Our analysis pointed out that a similar trend was also noted on the coin’s Chaikin Money Flow (CMF), which was also a bullish signal.
Additionally, BTC’s price was near the lower limit of the Bollinger bands, which can cause a trend reversal. However, not everything was in its favor, as the MACD displayed a clear bearish upper hand in the market.
Source: TradingView
Is an uptrend inevitable?
To better understand whether BTC would begin a bull rally, we took a look at its on-chain metrics. Though market indicators were bullish, a look at BTC’s on-chain metrics suggested that the possibility of an uptrend in the near term was slim.
CryptoQuant’s data pointed out that BTC’s net deposit on exchanges was high compared to the last seven-day average.
Its aSORP was red, meaning that more investors were selling at a profit. In the middle of a bull market, it can indicate a market top. Additionally, its binary CDD suggested that long-term holders’ movements in the last seven days were higher than the average.
Source: CryptoQuant
Read Bitcoin’s [BTC] Price Prediction 2024-25
More concerns were revealed when we checked market sentiment around the king of cryptos. Our analysis found that both its Coinbase premium and Korea premium were red.
This clearly indicated that selling sentiment around BTC was dominant both among US and Korean investors.
Source: CryptoQuant
