Bitcoin’s price action has managed to break above $115,000 after spending the majority of the past two weeks trading below this level. Bitcoin is now holding firm above $114,000, and the leading cryptocurrency has regained momentum over the past week that shows signs of renewed bullish strength.
According to technical analysis, a hidden bullish divergence is forming with the recent price action this week, and this could be the setup that pushes Bitcoin to new price highs.
Bitcoin Revealing Hidden Bullish Divergence
Technical analysis of Bitcoin’s weekly candlestick timeframe chart, which was posted on the social media platform X by crypto analyst CrypFlow, shows that Bitcoin could be on track to resume its journey of new all-time highs.
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Last week’s close means that Bitcoin has confirmed a higher price low in the weekly timeframe following the pullback that began after its August all-time high. As shown in the weekly candlestick chart below, this low is a higher low compared to June’s low below $100,000.
On the other hand, while the price printed a higher low, the Relative Strength Index (RSI) posted a lower low in the same time frame. This mismatch between price and momentum creates what is called a hidden bullish divergence, which is a technical pattern that suggests bullish continuation.
The weekly candlestick chart shared by CrypFlow shows Bitcoin defending an important support level around $114,000 and is now on two bullish weekly candlesticks. According to the analyst, if this divergence is confirmed as expected, it could provide the foundation for Bitcoin to push to new highs again. At the time of writing, Bitcoin is trading 5.7% below its current all-time high of $124,128.
Stochastic RSI Flips Bullish
The stochastic RSI indicator on the weekly timeframe has just flipped bullish, though confirmation will depend on how Bitcoin closes in the coming sessions. The last time such a bullish flip occurred on the weekly timeframe was in April, just before Bitcoin kickstarted a run that saw it close at bullish prices for seven consecutive weeks. A similar playout could see Bitcoin register at least five more bullish weekly closes in the coming weeks.
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The upcoming macroeconomic events could introduce volatility into the crypto industry, and this is worth keeping an eye on. The Federal Open Market Committee (FOMC) is set to meet on Wednesday, and expectations are running high that policymakers will announce an interest rate cut of 25 basis points or possibly even 50 basis points. An interest rate cut could have different effects, and history has shown that this could shift investor sentiment toward Bitcoin and other large-cap cryptocurrencies.
At the time of writing, Bitcoin is trading at $117,040, already playing out bullish continuation by being up by 9% from its September open.
Featured image from Pixabay, chart from Tradingview.com