Bitcoin's Technicals Suggests Deeper Pullback to $38K: Analyst
Bitcoin's RSI divergence signals correction, 10x Research said.
Bitcoin (BTC) has declined over 5% to $42,600 since spot ETFs debuted in the U.S. on Thursday in what appears to be a classic "sell the fact" price action.
The sell-off could continue over the near term, according to analysis of bitcoin's price patterns and technical indicators by 10x Research.
Bitcoin's RSI divergence signals correction," 10x Research, led by Markus Thielen, said in a note to clients Monday, adding the pullback could run out of steam near the dynamic support level of $38,000.
A bearish divergence occurs when prices reach a new extreme and momentum indicators like the relative strength index (RSI) don't, hinting at upside exhaustion.
BTC hit a two-year high above $49,000 last week, which the 14-day RSI failed to confirm, as seen in the chart below. The subsequent price drop has validated the bearish divergence.