Bitcoin Bullish Divergence Echoes Post-FTX Rally, Eyes $90K
Bitcoin's weekly chart flashes a rare bullish divergence, last seen after the FTX crash. The pattern suggests weakening selling pressure and a potential run toward $90,000. However, a bear flag breakdown threatens a drop below $50,000.
Quick Take
Bitcoin's weekly RSI is diverging bullishly while price holds near the 200-week SMA at $62K.
A similar divergence after the FTX crash preceded a 715% rally to new all-time highs.
The 50-week SMA near $91,755 is the first major upside target if momentum holds.
A bear flag breakdown keeps a downside target under $50,000 in play as a risk scenario.
Market Impact Analysis
BullishHistorical precedent of the bullish divergence pattern preceding a major rally and Bitcoin holding key support increases the likelihood of an upward move, though bear flag risk tempers conviction.
Speculation Analysis
Key Takeaways
- Bitcoin's weekly RSI prints a rare bullish divergence, a signal that preceded a 715% rally after the FTX crash.
- The 200-week SMA near $62,000 is acting as historical support, limiting downside risk.
- Bulls must reclaim $64,000-$65,000 to confirm the reversal and target $71,500-$73,000 and the $79,000 CME gap.
- A weekly bear flag breakdown keeps a drop below $50,000 in play, creating a binary outlook.
What Happened
Bitcoin's weekly chart has printed a rare bullish divergence for only the second time in its history. The last occurrence was in November 2022 after the FTX collapse, which preceded a 715% rally to new all-time highs. The pattern emerges as price makes lower lows while the Relative Strength Index (RSI) forms higher lows, suggesting selling pressure is exhausting. BTC dropped from $75,770 to around $63,000, but the RSI climbed back above 34 after dipping into oversold territory. This divergence is forming right on the 200-week simple moving average, a level that has marked bear market bottoms in 2015, 2018, and 2020.
The Numbers
Key metrics define this setup. Bitcoin's weekly RSI sits above 34 after rebounding from below 30, confirming the higher low. Price action shows a 16.8% decline from $75,770 to roughly $63,000, yet momentum is strengthening. The 200-week SMA at approximately $62,000 remains support, having capped downside in three previous bear markets. The last bullish divergence fueled a 715% move from $15,500 to $126,200. Now, the 50-week SMA near $91,755 is the first major upside target, with resistance stacked at $64,000-$65,000 and $71,500-$73,000.
Why It Happened
The divergence signals that bears are losing control despite lower prices. As Bitcoin fell to $63,000, the RSI stopped declining and began to recover—a classic sign that downward momentum is fading. This occurs when sellers exhaust themselves near key support levels. The 200-week SMA at $62,000 has historically attracted accumulation, and the rebound in RSI suggests buyers are stepping in at those levels. The market may be pricing in an end to the aggressive selling that drove BTC from highs, creating conditions for a trend reversal similar to post-FTX recovery.
What to Watch Next
- A weekly close above $64,000-$65,000 would confirm the bullish divergence and open a path to $71,500 and the $79,000 CME gap.
- Failure to hold the 200-week SMA near $62,000 could invalidate the setup and accelerate the bear flag breakdown toward $50,000.
- The 50-week SMA at $91,755 is the key long-term level to reclaim for trend continuation; a push above that would set sights on $100,000 and beyond.
This article is for informational purposes only and does not constitute financial advice.
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