Bitcoin’s RSI is rising while price trends lower, indicating a potential reversal based on historical behavior.
BTC remains range-bound between $103,832 support and $105,218 resistance, signaling potential for breakout.
Current divergence resembles a similar structure in April that preceded a notable price surge.
Bitcoin is showing a bullish divergence pattern on the RSI chart, a development that has caught attention all across the trading community. The top cryptocurrency stands at $104,560 as of reporting time, down 0.4% over the past 24 hours. This comes as the asset tests an important support level of $103,832 and has immediate resistance at $105,218.
Technical Indicators Suggest Mixed Momentum
Technical indicators show a sharp divergence between Bitcoin price action and the Relative Strength Index (RSI). While price action set lower highs in the previous weeks, the RSI line has been trending upwards. Such technical setup—also referred to as bullish divergence—has on most instances resulted in price bounces or temporary rallies.
Source: TradingView
The RSI currently stands at 49.09, below the 50-neutral mark, suggesting that while the asset remains out of overbought territory, relative strength is building. This trend was also evident in an earlier divergence spotted in April, which preceded a sharp upward movement. The current RSI behavior aligns with a similar setup, strengthening the case for bullish expectations. However, the MACD trading above the signal line showed positive momentum in the market.
Bitcoin Consolidates as Traders Await Breakout Signal
Bitcoin’s price has remained largely confined between its immediate support of $103,832 and resistance of $105,218. This tight range reflects indecision in the market, yet also hints at consolidation. Importantly, the price has not broken below the recent support, indicating a degree of buying interest at lower levels.
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The 24-hour price action has registered low volatility, ranging in a narrow band. This subdued phase has the potential to trigger a directional move, especially with the divergence pattern and current positioning on the RSI chart. Traders are anxiously awaiting a breakout above resistance or breakdown below support to determine the direction of the trend.
Bullish Divergence Renews Hopes of Bitcoin Rebound
Bitcoin has exhibited this bullish divergence previously when maintaining an important support level. A historical chart analysis in April shows a comparable state where price action declined yet RSI rose to a rally that followed. A similar chart construct has now been formed, which continues to confirm the possibility of the current technical indicators.
Market participants seek to be cautious but on alert, observing these events for confirmation of a trend reversal. If the trend continues and the price breaks above resistance, short-term demand for a move higher could reappear. In the meantime, Bitcoin moves sideways, with traders using RSI momentum and support and resistance levels to influence short-term direction.
