Bitcoin's weekly chart is signaling a potential downturn, with a bearish divergence that suggests a possible 20-30% drop. As Bitcoin nears key resistance levels, analysts are bracing for a significant decline, which could pave the way for a major altcoin (ALT) season.

Bearish Divergence Signals Bitcoin Downturn

Bitcoin's weekly chart is flashing warning signs, with a clear bearish divergence highlighted by red lines showing a widening gap between price and momentum. As Bitcoin approaches a critical resistance level, marked by blue circles on the chart, many analysts anticipate a sharp downturn reminiscent of past market patterns.

A Potential Four-Month Altcoin Rally

While Bitcoin faces the possibility of a decline, altcoins may be on the brink of a rally. The last major ALT season in 2021 lasted approximately four months and coincided with a significant drop in Bitcoin's dominance. Historical patterns suggest that a similar ALT season could be on the horizon, triggered by Bitcoin's potential pullback. This could present short-term gains for investors focusing on altcoins as Bitcoin retreats.

Projected 20-30% Decline for Bitcoin

The anticipated drop in Bitcoin is projected to be between 20-30%, as indicated by the pink box on the chart. The Relative Strength Index (RSI) is also expected to hit the 20 level, aligning with the lower boundary of the current channel. This scenario mirrors historical market cycles, where rapid market shifts have caught traders off guard.

The speed at which these changes occur is crucial; a phrase often used in trading, “blink, and you will miss it,” aptly describes the potential rapidity of these developments. Market participants need to stay informed and vigilant as these shifts unfold.

Timing is Key

Bitcoin’s bearish divergence may indeed set the stage for an explosive altcoin season, but timing will be critical. As the market braces for these changes, investors should be prepared for quick movements and potential opportunities in the altcoin market.

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