Bitcoin (BTC) has formed a rare bullish divergence on its weekly Relative Strength Index (RSI), indicating a possible trend reversal and signaling momentum improvement amid consolidation below key resistance levels.
Technical Signal and Historical Context
On July 18, analyst Ali Martinez shared a weekly chart showing Bitcoin's price making a lower low while the RSI makes a higher low. This bullish RSI divergence often points to weakening bearish momentum and potential upward movement.
The current pattern resembles the setup near Bitcoin's 2022 bear-market bottom when BTC formed a major low near $16,000 before rallying over 700%. Presently, the divergence is developing around the $58,000 to $60,000 range, with the RSI rising from oversold levels near 30.
This type of divergence has only appeared twice on Bitcoin's weekly chart since 2022. However, analysts emphasize that this signal alone does not confirm a breakout. Bitcoin must surpass and sustain above the $65,000 resistance to validate a larger bullish trend.
Market and Fundamental Factors
The bullish setup emerges amid a complex macroeconomic environment, with Bitcoin trading in a wide range while investors evaluate inflation data, Federal Reserve policies, and geopolitical uncertainties.
Despite these challenges, Bitcoin has rebounded toward $65,000, supported by softer U.S. inflation readings and renewed inflows into spot ETFs. Institutional demand remains strong as large holders have accumulated more than 270,000 BTC valued at approximately $16.7 billion over the past two weeks, even as ETFs experienced significant outflows. Such accumulation patterns historically align with major market lows.
Given the expanded size and institutional nature of today's market compared to 2022, replicating a 700% rally would require substantially larger capital inflows than in prior cycles.
Current Price Action and Outlook
At press time, Bitcoin was trading around $64,260, up roughly 0.3% in the last 24 hours and 0.45% over the week. It currently trades above its 50-day simple moving average (SMA) of $63,596, indicating positive short-term momentum, yet remains below the 200-day SMA near $73,203, reflecting unresolved longer-term resistance.
This information is for informational purposes and does not constitute financial advice.
