- Bitcoin’s price chart shows a divergence between rising highs and weakening RSI, hinting at a market pullback.
- Historical patterns suggest Bitcoin could repeat past ETF-driven price spikes followed by sudden drops.
- Traders are focusing on $92,000 and $88,000 support zones to avoid further losses and manage risks effectively.
Bitcoin’s recent 4-hour chart shows a concerning bearish divergence, which has analysts warning of a price correction ahead. The cryptocurrency is struggling to maintain upward momentum as its Relative Strength Index diverges from price, creating a scenario often associated with reversals. Bitcoin, which recently hit $108,079.64, now faces barriers as traders watch for signs of further economic risk.
Technical Indicators Show Weakening Momentum
Bitcoin’s price has been forming higher highs, yet the RSI is showing lower tops, signaling that bullish is fading. This divergence is a textbook indicator of a weakening trajectory and often precedes market corrections. Analysts are now closely monitoring support levels near $92,000 and $88,000, as these zones could determine the token’s immediate direction.
Furthermore, the RSI has fallen below barriers, adding weight to the bearish outlook. When the indicator fails to sustain its upward trajectory, it often reflects reduced buying strength, leaving the asset vulnerable to downward pressure.
The chart provides clear evidence of this trend, leading to heightened caution among traders and investors.
Mirroring Historical ETF Pump-and-Dump Cycles
Analysts have drawn parallels between the current market structure and previous pump-and-dump trends linked to Bitcoin ETF announcements. During past ETF-related events, the token’s price experienced rises, only to reverse and fall drastically after speculative enthusiasm subsided.
The current graph closely resembles these past movements, raising fears that the coin may be repeating the same cycle. With RSI trends declining in a similar fashion, the risk of a correction looms large.
These comparisons to past market behavior emphasize the importance of understanding previous trends. Traders who recognize these warning signs may have an advantage in navigating the potential volatility ahead.
Focus Shifts to Critical Support Levels
Investors are advised to monitor assistance levels at $92,000 and $88,000. A break below these limits could lead to increased selling pressure and a deeper correction.
Besides technical indicators, understanding Bitcoin’s behavior during similar events in the past could provide insights. Historical data suggests that sharp price reversals often occur following speculative price rallies driven by ETF-related news.
As Bitcoin’s momentum falters, traders are urged to avoid overly optimistic positions and instead focus on managing risk effectively.
The post Bitcoin Faces Risk as Bearish Divergence Signals Possible Market Reversal appeared first on Cryptonewsland.
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