In recent weeks, Bitcoin price analysis has turned increasingly cautious as technical indicators hint at bearish divergence, suggesting that the current rally may be weakening. While Bitcoin continues to push for new highs, momentum oscillators like RSI and MACD are failing to confirm this strength.

This divergence between price action and momentum is a warning signal that a price correction might lie ahead. In this article, we’ll dig deep into what exactly bearish divergence means, how it applies to Bitcoin now, what key support zones to monitor, and how traders and investors can prepare. By the end, you’ll have a clearer view of the risk profile ahead and a more grounded outlook on whether Bitcoin could see a pullback in the near term.

What Is Bearish Divergence (And Why It Matters)

To understand the present risk in Bitcoin’s rally, we first need to lay a solid foundation: what is bearish divergence, how is it detected, and why is it important in technical analysis.

Regular vs Hidden Divergence in Technical Analysis

Regular bearish divergence occurs when an asset’s price makes higher highs but a momentum indicator (such as RSI, MACD, or a stochastic) makes lower highs. This discrepancy signals that the upward move in price is losing strength — the bulls are pushing prices higher, but momentum is not keeping pace. Traders often interpret this as a potential reversal or at least a weakening of the upward trend.

Hidden bearish divergence is a subtler variation: here, the price forms lower highs, while the oscillator maks higher highs — a pattern sometimes signaling that the current trend (which in a downtrend would be continuing downward) still retains strength behind it. However, in the context of a rally, the regular bearish divergence is what draws more attention among traders.

In practical terms, these divergences suggest that while the trend appears bullish, momentum is not confirming. That’s important because momentum often leads price; when momentum fades, price tends to follow.

Why Divergence Is a Reliable Warning Sign (But Not a Guarantee)

Divergence doesn’t guarantee that a price reversal will occur right away, but it frequently serves as an early warning. Because it highlights a mismatch between price and the underlying momentum, divergence alerts traders to take caution or begin looking for confirmation of a trend shift.

That said, divergence signals can fail — especially in strong trends or markets with sustained momentum. They’re more reliable when they appear on higher time frames (such as daily or weekly charts) rather than in short-term noise.The more timeframes that exhibit divergence, the more weight the signal often carries.

Current Bitcoin Price Action Signs of Weakening Momentum

Now let’s apply these concepts to Bitcoin’s current chart and market behavior. What is the evidence that a bearish divergence is forming, and what implications could it carry?

Multiple Timeframes Show Divergence

Bitcoin is reportedly showing bearish divergences across multiple timeframes, compounding the risk of a near-term pullback. On weekly charts, price has made higher highs, while RSI has printed lower highs — a classic signal of decelerating momentum. Some analysts refer to this as a “triple RSI divergence.” On daily and even shorter timeframes, similar divergence patterns are emerging, reinforcing the warning.

For example, Bitcoin’s rally toward the $108,000–$110,000 zone has seen repeated rejections, and currently, the RSI is failing to keep up, forming lower peaks even as price tests new highs. In short, the momentum behind recent upside moves is fading.

Volume and Resistance Behavior

Beyond the divergence signal, supporting evidence is seen in weakening volume and resistance behavior. Bitcoin’s attempts to break above key resistance, such as the $108,350 region, have lacked the conviction of large volume surges.

The price is struggling to sustain push-throughs beyond that zone, meaning supply is still heavy there.  When price fails to break resistance with momentum and volume, and a bearish divergence is present, the odds increase that a rotation or pullback may follow.

Scenario Comparisons and Historical Caution

Some market observers caution that the 2025 divergence setup is reminiscent of 2021, when a pronounced divergence preceded a major correction of more than 50%, with Bitcoin falling from near $70,000 to around $34,000.

Indeed, some forecasts suggest Bitcoin could dip toward the $64,000 area if conditions turn bearish enough. Others argue that the divergence is lagging and may not unfold immediately, especially if bullish sentiment remains strong and institutional inflows continue. Still, current analysts point to a possible pullback toward $100,000, or even lower if support breaks. That risk is heightened by the divergence signals now being visible.

Key Levels & Price Targets to Monitor

To navigate potential volatility, it’s crucial to map out the support and resistance zones that could either halt or accelerate a Bitcoin correction.

Resistance The Roadblocks Above

The most immediate resistance is in the $108,000–$110,000 range, where Bitcoin has repeatedly been rejected and where divergence is most visible. This zone lines up with historical supply and overhead resistance zones, making it a meaningful ceiling.

If Bitcoin clears that with conviction and strong volume, divergence patterns may be invalidated or at least postponed. But the current failure to sustain above it strengthens the bearish case.

Support Zones That May Cushion the Drop

On the downside, several support zones deserve attention:

• Around $100,000: This is a psychological and technical level that has acted as a floor in recent weeks.

• Near $97,000–$98,500: Some analysts highlight this range as a region that bulls must defend to avoid a deeper breakdown.

• A more extended downside scenario points toward prior swing lows (for example, in the $90,000s).

• In an extreme pullback scenario, a return toward $64,000 has been floated as a worst-case target if momentum fully collapses.

Which of these levels will act as support depends heavily on the speed, strength, and volume behind any decline.

Confirmation Signals to Watch

To validate a downside move prompted by divergence, traders often seek confirmation via.  A break below key support levels (e.g. $100,000) on increasing volume, Momentum or oscillator crossovers (e.g. RSI or MACD turning sharply downward) A breakdown from consolidation or trend structures.

A “death cross” (50-day moving average crossing below the 200-day) could add to bearish conviction, though it is a lagging indicator. If these confirmations appear, it would lend credence to the idea that Bitcoin could enter a correction phase rather than a shallow pullback.

What Could Cause a Deeper Correction

While divergence is a warning light, other risk factors could amplify a correction. Below are key catalysts that could exacerbate weakness:

Macro and Sentiment Shifts

Broader macroeconomic turbulence — such as interest rate surprises, regulatory pressure, or bitcoin-unfriendly policy shifts — could sap appetite for risk assets like Bitcoin. A negative change in sentiment or macro flow could turn a technical warning into a real drop.

Institutional Rotation

If institutions begin rotating capital out of Bitcoin and into other assets (including altcoins), that reallocation may aggravate downside pressure. Many analysts note that divergence in Bitcoin’s dominance chart could presage capital flow into altcoins.

Leverage and Liquidations

Crypto markets are highly sensitive to leverage. A small initial drop could trigger cascading liquidations, deepening the decline quickly. In the context of weakening momentum, that risk becomes more salient.

Failure to Sustain Breakouts

If Bitcoin attempts to break resistance but fails repeatedly — particularly with fading volume — bulls may capitulate. That could flip sentiment swiftly and open the door to a sharp pullback.

Also Read: Unlock 10 Winning Bitcoin Trading Strategies Today

Trading and Risk-Management Considerations

If you’re trading or investing in this environment, what are prudent approaches to manage risk around this divergence-warned outlook?

• Use tighter stop-losses: Given the divergence signal, allow less room for adverse moves.

• Wait for confirmation: Don’t jump to assume a correction — wait for support breakdowns or momentum confirmation.

• Scale exposure: Consider reducing long positions or scaling into hedges (like short exposure, inverse products, or cash).

• Monitor multiple timeframes: Divergence on weekly and monthly charts carries more weight than in short-term noise.

• Stay aware of volume: Large volume moves often validate reversals; weak volume breakouts often fail.

• Be nimble and flexible: Crypto markets are volatile; be ready to change stance quickly in response to new price action.

Possible Correction Scenarios

Let’s sketch a few potential paths Bitcoin could follow from here, assuming the bearish divergence plays out in different magnitudes.

Scenario A Mild Pullback

Bitcoin may slip back toward $100,000 or modestly below, bounce at support, and resume the uptrend if momentum recovers. This would be more of a mid-cycle correction than a deep bear phase.

Scenario B Deeper Correction

If support around $100,000 breaks convincingly, BTC could decline to $97,000–$98,500, and possibly test lower support levels in the $90,000s. This route aligns with some “correction” forecasts currently under discussion.

Scenario C Structural Reversal

In a worst-case or extended scenario, the bearish divergence triggers a reversal with momentum collapsing and large capital outflows, driving BTC toward $64,000 or even lower. This is less likely without a major catalyst but cannot be ignored when multiple indicators align.

Which scenario plays out depends heavily on confirmation signals and market risk sentiment going forward.

Conclusion

Bitcoin’s recent price behavior is flashing warning signals. The emergence of bearish divergence — where momentum indicators fail to confirm new highs in price — suggests that the current rally may be losing strength. While divergence is not a guarantee of reversal, when combined with weak volume, repeated resistance rejections, and macro uncertainty, it demands heightened caution.

Whether Bitcoin experiences a mild retracement to around $100,000 or something deeper toward $90,000s or beyond will depend on how support zones hold, whether confirmation signals emerge, and how market sentiment evolves. Traders should remain nimble, closely watch key levels, and manage risk prudently in case this warning evolves into a full-blown correction.

FAQs

What exactly is a “bearish divergence,” and why is it relevant to Bitcoin

A bearish divergence occurs when Bitcoin’s price makes a higher high, but momentum indicators like RSI or MACD make lower highs. This mismatch signals weakening momentum even though price is higher — a red flag for potential reversal or correction.

Does bearish divergence always lead to a price decline

No — divergence is a warning, not a certainty. In strong, extended uptrends, divergence may fail or be delayed. It’s most reliable when confirmed by breakdowns in price or decisive momentum shifts.

Which indicators are most useful for spotting divergence

Commonly used indicators include RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), and stochastic oscillators. Higher-timeframe versions (daily, weekly) tend to yield more reliable divergence signals.

What levels should traders watch if Bitcoin corrects

Key support levels include around $100,000, followed by $97,000–$98,500, and lower swing zones in the $90,000s. On the upside, resistance near $108,000–$110,000 is critical.

How should I manage risk in light of the divergence warning

Use tighter stop-losses, scale exposure down, wait for confirmation before acting, diversify timeframes, and remain flexible in strategy. Prioritize capital protection while watching for signs of a trend reversal.