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Bitcoin Shows Triple Bearish Divergence, Analyst Warns of Trend Exhaustion
Bitcoin's recent activity suggests a potential downturn, according to analyst Tony Severino. He identifies a "triple bearish divergence" in higher timeframes, indicating that the upward trend may be waning despite new price highs.
Key Insights
- A triple bearish divergence occurs when price makes three successive higher highs while technical indicators show lower highs, suggesting weakening momentum.
- The first high correlated with strong market excitement around an ETF launch, marking a peak in momentum.
- The second and third highs saw weaker internals, with fewer aggressive buyers and profit-taking, indicating market exhaustion.
- Severino emphasizes that this pattern is a setup requiring confirmation from breaking trendlines and moving averages, not a standalone action trigger.
- A significant break past key moving averages (20 and 50 EMA) and changes in RSI patterns signal potential trend shifts.
Potential Downside
- Severino uses Fibonacci levels to suggest a retracement target between $44,100 and $34,409, estimating a possible 60-70% drop from recent highs.
- He cautions about a larger bearish pattern on even higher timeframes that could influence Bitcoin's longer-term outlook.
- At press time, Bitcoin's price stood at $87,658.
Severino underscores the importance of risk management, noting that these signals do not guarantee outcomes and are not financial advice.