Bitcoin [BTC] has been experiencing strong upward momentum throughout the month. Historically, September is usually accompanied by a bearish trend. However, this month has seen a dramatic turnaround, with BTC setting higher lows.
In fact, as of this writing, Bitcoin is trading at $65,530. This marks a 10.52% gain on the monthly chart and continues a 4.16% uptrend over the past week.
However, there has been a minor correction over the past 24 hours, with Bitcoin down 0.46%.
Therefore, the current market conditions have everyone talking about the direction of Bitcoin. I believe that the bullish trend will continue based on the bullish RSI divergence.
What is the market sentiment?
Here I cite the bullish RSI divergence to argue that bulls are leading the market.
The RSI has not formed a bearish RSI divergence on the daily chart. However, the RSI continues to confirm a bullish trend from the lows. Therefore, it has been confirming a bullish RSI divergence.
Specifically, the absence of a bearish divergence means that the price increase is supported by momentum and there are no clear signs of a reversal yet.
When a bearish RSI divergence occurs, it indicates that bullish momentum is fading and could mean that a price correction is imminent.
So, while BTC may have made lower lows recently, the RSI is making higher lows, indicating that momentum is building despite falling prices.
Typically, a bullish RSI divergence suggests that selling pressure is waning while buying interest is growing, leading to further price increases.
What the BTC chart says
Bitcoin is enjoying favorable market conditions. Hence, these market conditions could see BTC rise further on the price charts.
For example, the exchange-to-whale ratio has dropped from a high of 0.68 to 0.511 at press time. This drop suggests that whales are moving their BT from exchanges to private wallets.
Such market behavior is a bullish signal, indicating that large investors have no plans to sell in the short term.
Furthermore, Bitcoin’s net unrealized profit and loss (NUPL) has risen from a low of 0.4 to 0.51 in the past week. As NUPL rises, it indicates that investors are taking profits.
This usually happens during a bullish phase of the market as prices rise more than the purchase value. As a result, this leads to increased optimism as participants become more confident in the future potential of the market and expect prices to rise further.
Finally, Bitcoin’s DyDx trading funding rate has remained positive over the past week. A positive DyDx trading funding rate indicates that long position holders are paying shorts to maintain their positions.
In such a market situation, investors are more inclined to hold long positions in anticipation of price increases.
In short, Bitcoin is experiencing strong upward momentum and bulls are set to dominate the market. Therefore, in this case, BTC will reclaim the $66,500 resistance level in the short term, leading to further gains on the price charts.
