Despite bearish divergence and multiple sell signals, Bitcoin seems determined to hold its ground, currently trading above $94,000. The on-chain data appears to bolster this bullish sentiment, with an increase in active addresses and a decrease in exchange reserves.
Technical analyst Ali Martinez pointed out a bearish divergence on the 4-hour chart between Bitcoin’s price and the Relative Strength Index (RSI). Simultaneously, the TD Sequential indicator has issued multiple sell signals, indicating a potential slowdown in the upward price momentum despite the bullish pattern that has developed recently.
Bitcoin’s trading volume has seen a significant boost, with a 16.49% increase to reach $38.49 billion. This increase mirrors higher buying and selling activity. Over the last 24 hours, Bitcoin has risen by 3%, now trading at $94,800. However, the emerging divergence cautions traders about possible future pullbacks or trend reversals.
Yet, the on-chain data projects a different picture. According to CryptoQuant, the exchange reserve is dwindling, currently standing at 2.5 million BTC, the lowest in years. Consistent outflows to exchanges suggest that users are transferring Bitcoin to their cold storage wallets, which is indicative of long-term bullish sentiment.
Additionally, Bitcoin’s active addresses remain high, with the current count standing at 1.03 million, indicating robust network activity. Historically, an increase or stability in active addresses has correlated with a rise or stability in prices, even during periods of volatility.
As per Coinglass, the BTC spot outflow remains higher than the inflow, with the net sessions recording negative numbers recently. These outflows further increase investor confidence as coins are moved from exchanges to storage wallets, alleviating exchange pressure.
Despite the need for a short-term bearish approach, most technical indicators suggest the potential for continued upward movements. CryptoJelleNL noted that Bitcoin has bounced back to the 200-MA for the third time in this cycle. Historically, once Bitcoin crosses this moving average, it tends to consolidate above it for an extended period.
Crypto Caesar added that Bitcoin recently responded to a key support level, showing promising indicators. If Bitcoin manages to sustain this rally past the support levels, his analysis points to higher targets.
Additional evidence supporting bullish prospects is another chart showing an ongoing upward trend with constant booms after consolidations. Bitcoin has been trading within the pennant formation in a bullish trend, forming higher lows and higher highs. However, despite these moves, traders must remain cautious in the short term.
