Bitcoin recorded a notable technical signal that may indicate an approaching reversal in its prolonged downtrend. The cryptocurrency completed a “perfected” TD9 buy setup on the monthly timeframe—a first since July 2022—suggesting a possible shift after months of bearish price consolidation.
The TD9 indicator, derived from the Tom DeMark Sequential system, highlights potential trend changes when price closes consecutively higher or lower relative to a candle four periods prior. In this case, Bitcoin’s monthly chart showed nine consecutive candles closing lower than four periods earlier, forming a downtrend signal now “perfected” by the latest price action. Analysts caution that while this setup draws attention, it does not guarantee an immediate market bottom or buy opportunity.
The last TD9 downtrend signal occurred mid-2022, after which Bitcoin spent several months stabilizing before confirming its bear market low. Market commentators emphasize that the current TD9 signal should prompt closer monitoring rather than decisive action, as it reflects an inflection point rather than a definitive reversal.
Alongside the TD9 setup, growing bullish divergences in the relative strength index (RSI) across multiple timeframes add to the technical narrative suggesting a potential trajectory change. These RSI divergences, indicating oversold conditions paired with upward momentum hints, catch the attention of traders looking for early signs of recovery.
Despite these signals, the broader market consensus remains that Bitcoin could dip to new lows before exiting the bear market cycle. Targets around the $55,000 level have emerged among some analysts, based on price cycle analogies projecting that the current downturn is roughly two-thirds complete. This cautious outlook aligns with the historical pattern of extended bear market consolidations following initial bottoming signals like the TD9.
Technical experts and commentators urge investors not to interpret the TD9 “perfected” setup as an automatic buy trigger but as a meaningful development warranting increased vigilance. The convergence of multiple RSI bullish divergences enhances the probability of a trend change, yet the market’s final reversal remains a nuanced prospect.