Bitcoin is exhibiting a rare technical pattern known as a bullish divergence, where its momentum indicators improve even as its price falls. This phenomenon has only appeared once before on the weekly chart, during the market bottom triggered by the FTX collapse. The current setup hints at a potential rally toward the $90,000 mark.
Specifically, Bitcoin's weekly relative strength index (RSI) has rebounded from oversold levels, forming a higher low despite recent price drops from around $75,770 to near $63,000. This disconnect suggests that selling pressure might be easing, setting the stage for a price rebound. Historically, the previous instance of a similar divergence preceded an extraordinary 715% increase in Bitcoin’s value, lifting it from roughly $15,500 to a record near $126,200.
Further strengthening this bullish outlook is Bitcoin’s position relative to its 200-week simple moving average (SMA), currently near $62,000. This long-term indicator has repeatedly served as a support zone at the end of major bear markets in 2015, 2018, and 2020. Analysts consider this level an "ideal area to accumulate" Bitcoin, with broader confirmation hinging on whether the asset can break above the $64,000 to $65,000 range.
If Bitcoin surpasses that threshold, resistance levels around $71,500 to $73,000 could be targeted, possibly extending to the CME futures gap near $79,000. The next significant barrier aligns with the 50-week SMA, close to $91,755, which has historically acted as dynamic resistance during recovery phases.
However, despite the encouraging momentum, downside risks remain. Bitcoin currently trades within the breakdown phase of a weekly bear flag, a technical pattern signaling ongoing vulnerability. This formation typically follows a rebound within a rising parallel channel before further price declines, keeping the $50,000 support in focus. Investors should weigh this caution against the technical signs of a rebound.