There is a certain unease in the trading community over a bearish divergence in Bitcoin, despite the asset’s apparent flirtation with an all-time high. The most recent episode of Crypto World put a finer point on it: while a rally in equities may well propel Bitcoin higher, there are warning signs for a number of top coins.
Risk of Negative Divergence on Daily Charts
The host of the broadcast noted that as Bitcoin nears its historic peak, one has to be mindful of the daily chart where negative divergence is a distinct possibility. The Relative Strength Index (RSI) is telling the story; it is putting in lower highs at the very time the price is trying to make headway. Should that RSI trend hold, the host cautioned, it would be a sign of flagging momentum and likely a prelude to a correction in the near term.
Ethereum is showing much the same thing as it puts resistance at $2,800 to the test. The analysis suggests that if this kind of divergence does not abate, both it and Bitcoin are in for some corrective action over the coming week or two.
Impact of Stock Market Moves on Crypto
One cannot overlook the wider market context. In a recent Crypto World discussion, the point was made that a continued advance in US stocks to fresh all-time highs would be enough to put the kind of bullish pressure on Bitcoin required to clear the $86,000 to $88,000 resistance it is facing at present. A move through that level would then put the next obstacle in the form of the $96,000–$98,000 zone in view.
Then again, there is the matter of bearish divergence. If US equities lose their steam, the prospect of a correction for Bitcoin and its peers becomes much more pronounced. The host was clear that this is why traders must be watching the macro signals as well as the crypto charts with some care.
Key Resistance Levels for Altcoins
There are a number of top altcoins at pivotal points in addition to Bitcoin and Ethereum. Take Solana for instance; it is up against strong resistance in the $119 to $124 area. A break above that, as Crypto World has put it, would be enough to send SOL to $144. XRP is in a different position, consolidating from $1.30 to $1.60, yet any negative divergence could prompt a correction.
Then there is Chainlink, with its own resistance to contend with between $14.10 and $14.30. The host pointed out that LINK’s chart mirrors the kind of bearish divergence one might see in Bitcoin, so an inability to get past this range means downside risk is on the table. In short, the threat of negative divergence is weighing on the near-term picture for these leading digital assets.
This article reflects the channel author’s opinion and is not investment advice.
Every call by Crypto World and how it played out — in the BuyCrypt bloggers tracker.
Source — Crypto World: https://www.youtube.com/watch?v=cYjll3c_apI
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