Bitcoin (BTC) is signaling a potential long-term bottom as a key leading indicator prepares for a higher low.
Key points:
Bitcoin RSI is approaching a critical long-term position for the fate of the bear market.
RSI needs a weekly bullish divergence to repeat its early-2023 rebound.
A trader says he is “not in a rush” to reenter the market with the comedown from all-time highs just a few months old.
Bitcoin RSI: All eyes on higher low
New analysis covering relative strength index (RSI) data on BTC/USD concludes it could soon be “time to pay attention.”
Bitcoin bear-market bottoms often follow the start of a bullish divergence with RSI on weekly time frames.
For trader Jelle, current market behavior is following historical trends, and Bitcoin’s next inflection point may be around the corner.
“When $BTC's weekly RSI makes a higher low again, it's time to pay attention,” he wrote on X.
A classic bullish divergence locks in when RSI makes a higher low while price makes lower lows. Jelle, however, says that price has room to maneuver and still preserve the emerging recovery.
“Doesn't matter if BTC makes a higher low, equal low, or lower low,” he continued.
“When RSI starts moving higher again, the bottom is very close - or already in.”
BTC price bear flag still in play
RSI last flipped bullish at the end of Bitcoin’s 2022 bear market, and its signals preceded a period of upside that continued for over a year.
Related: Bitcoin tests old 2021 top as gold falls to six-week lows under $4.7K
At the time, talk also focused on reclaiming the 200-week exponential moving average (EMA) as support, something that occurred in March 2023.
As Cointelegraph reported, the 200-week EMA was only lost again last month, with analysis calling the trend line “unreliable.”
Jelle, meanwhile, is among those speculating that previous cycles demand a much longer bear market than the few months that have elapsed so far.
“Previous bear markets all lasted around a year. $BTC topped just 23 weeks ago, and looks like this,” he told X followers.
“I'm not in a rush to buy back in.”
A separate chart drew attention to a possible bear flag formation under development — a sign of weakness that could result in a fresh support failure in a manner similar to January.
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