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Bullish Bitcoin RSI divergence has analysts calling for 2022-style bear market bottom
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- DeepHorus
Bitcoin (BTC) continued its battle to reclaim $60,000 into the weekend as chart cues fueled hopes of a recovery, with analysts pointing to a bullish relative strength index (RSI) divergence reminiscent of the 2022 bear market bottom. Data from TradingView showed BTC/USD cooling volatility after returning above the $60,000 mark, with a series of higher swing lows on hourly time frames combined with encouraging RSI readings. On the four-hour chart, a bullish divergence was occurring, where RSI makes higher lows while price makes lower lows, catching the attention of market participants who began to anticipate a BTC price reversal.
The RSI divergence has sparked comparisons to the end of the 2022 bear market, when a weekly RSI bullish divergence kicked in while BTC/USD set its bear-market low of $15,600. Pseudonymous trader Rod argued that history was repeating itself, posting on X, "Once you see it, you can't unsee it. It's 2022 again." At that time, the divergence provided a durable market floor, leading to a significant recovery. Additionally, the four-hour RSI fell to just 11.4 at the start of June, marking one of its lowest levels on record, further bolstering the bull case.
On Friday, crypto analyst Lukasz Wydra added daily time frames to the mix, stating, "The bullish RSI divergence on the Bitcoin chart has now been officially confirmed. It may still deepen, but at the same time we can clearly see that Binance continues to defend the price." Wydra described the RSI signals as an "encouraging sign" for the market. However, some traders maintain that new BTC price lows are still possible before any sustained recovery.
Niels Klaver, cofounder of crypto platform STABL Agency, repeated calls for a trip to $55,000 "before any big move" to change the status quo. Trader and analyst Rekt Capital suggested that a relief bounce could characterize the market in July, contrasting with June price action. Once BTC/USD confirms the 50-month exponential moving average as new resistance, it could see "August cancellation of relief and additional downside due to $60k weakening as support," he wrote this week.
The implications of a potential bullish divergence are significant, as a confirmed reversal could signal the end of the current bearish phase. If history repeats, the market may be forming a durable bottom similar to 2022, paving the way for a sustained uptrend. However, the divergence may deepen before a reversal, and traders should remain cautious given the mixed signals from analysts.
Looking ahead, the coming weeks will be critical for Bitcoin's trajectory. July's historical tendency for positive returns could provide a short-term relief, but the overarching trend remains uncertain. Investors will closely watch the RSI and price action to confirm whether the divergence holds or new lows emerge. The interplay between bullish divergences and bearish forecasts sets the stage for a volatile summer in crypto markets.
