Bitcoin’s weekly bullish divergence points to $90K

Bitcoin recorded a rare weekly bullish divergence while trading near its 200-week simple moving average after the price fell from about $75,770 to roughly $63,000. The weekly relative strength index rebounded from below 30 to above 34 as of Monday, forming a higher low while the price made a lower low.

A weekly bullish divergence has appeared only once before, after the market shock in November 2022. That earlier signal preceded roughly a 715% rally from about $15,500 to a record near $126,200. If the current divergence is confirmed this week, it would be only the second such signal on the weekly chart.

The 200-week simple moving average sits near $62,000 and has acted as a bottom area at the ends of the 2015, 2018 and 2020 bear markets. Analyst Michael van de Poppë wrote that the 200-week SMA is an “ideal area to accumulate” and wrote that bulls need a move above $64,000–$65,000 for further confirmation. He noted that a break above that range could clear a path to $71,500–$73,000 and the CME futures gap near $79,000, and he identified the zone above $90,000, near the 50-week SMA at about $91,755, as the next resistance area.

At the same time, Bitcoin is in the breakdown stage of a weekly bear flag. The flag’s measured target lies below $50,000 if the pattern plays out. The pattern forms when price rebounds inside a rising channel after a sharp drop and then breaks lower; Bitcoin has slipped below that channel and would need to reclaim the flag’s lower trend line to remove the immediate risk of deeper losses.

Technical indicators are mixed: momentum measures have improved while price action still reflects selling pressure. Confirmation of the RSI divergence, a hold of the 200-week SMA and a move above $64,000–$65,000 would shift focus to the 50-week SMA and the $90,000 region. Failure to reclaim the flag’s lower trend line would keep the bear-flag target under $50,000 in view.