Bitcoinโs remarkable surge toward $106K has everyone cheering, but beneath the surface, the RSI (Relative Strength Index) is flashing a warning sign. This technical indicator, often overlooked during rallies, is clearly showing a bearish divergenceโa classic sign that momentum is weakening while prices keep climbing. In simple terms, while Bitcoinโs price has been setting higher highs, the RSI is charting lower lows, suggesting that the current upward move is losing steam.
Now, before panic sets in, letโs clarify: this doesnโt mark a trend reversal, but rather signals a potential deep correctionโa natural pause before the next leg up. Historical patterns suggest that such divergences often precede pullbacks, where Bitcoin could revisit key support levels. The first critical zone lies around $95,000, with deeper corrections potentially targeting $88,000 (38.2% Fibonacci retracement) and $82,500 (50% retracement). These levels are where savvy traders and institutions may begin accumulating positions again.
If you remain bullish, the $106,500 resistance is your line in the sand. A decisive breakout above $110,000 could invalidate the current bearish setup and reignite upward momentum toward new highs. However, traders should remain cautious, as declining volume and exhausted RSI momentum suggest Bitcoin is running on fumes. The marketโs smart money is already watching this divergence closely, positioning for the inevitable pullback.
In conclusion, while Bitcoinโs price action looks strong, technical signals tell a different story. Bearish divergence warns that the rallyโs energy is fading. Traders should keep a close eye on support zones and plan accordinglyโthis isnโt a trend change, but itโs certainly a moment for caution. The charts donโt lie, and ignoring these signals might leave you unprepared when BTC makes its next big move. Trust the data, manage your risk, and donโt let emotions dictate your strategy. ๐
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