Bullish Momentum Wanes
Despite recently reaching new all-time highs, Bitcoin is showing signs of weakness in its bullish momentum. A hidden bearish divergence on the RSI indicator suggests a weakening trend. This same signal appeared in March 2024, just before a 20% price drop. Traders should therefore prepare for volatility in the short term.
Bitcoin Faces a Downside Threat
There’s a gap located between $114,380 and $115,635. History shows that Bitcoin tends to “fill” these types of gaps, meaning the price retraces to cover this untraded zone. With 7 gaps already filled out of 9 this year, the chances are high that Bitcoin will return to this level in the near future.
Vigilance Amid Volatility
The Bitcoin Cycle Indicator Index (IBCI) has recently entered the distribution zone, associated with market euphoria and intermediate peaks. Although the peak of the index has not yet been reached, this elevated reading constitutes a warning signal regarding the risk of a short-term correction.
While the bullish long-term trend remains intact, investors should prepare for a period of volatility in the short term. Technical signals, such as the bearish divergence, the CME gap, and the IBCI index, point to a possible correction below $115,000. Increased caution is warranted in the coming weeks.
