Analyst and trader Ali Martinez is warning that a bearish signal is flashing on Bitcoin (BTC) amid a correction that has seen the crypto king fall to a three-month low.
Martinez tells his 128,800 followers on the social media platform X that a bearish divergence is evident on Bitcoin’s weekly time frame.
A bearish divergence occurs when price is recording higher highs and higher lows while an indicator such as the Relative Strength Index (RSI) is recording lower lows and lower highs. The RSI indicator is a momentum oscillator used to determine oversold or overbought conditions.
According to Martinez, Bitcoin had a similar divergence in November of 2021 prior to the bear market that followed and which saw BTC fall from the then-record high of around $69,000 to a cycle low of about $15,500 a year later.
Over the short term, Martinez says Bitcoin lacks “significant support” below the $93,198 price and $70,440.
The crypto trader further says that if the current Bitcoin cycle mirrors that of the first-halving cycle which ran from 2011 to 2015, it could be an indication that the crypto king topped out at $108,800 and is primed for further correction.
If Bitcoin’s price action mirrors that of the second-halving cycle, Martinez says,
“If Bitcoin follows the 2015-2018 cycle, this could suggest much more room to grow before the market top!”
Bitcoin is trading at $85,822 at time of writing, down by about 21% from the all-time high reached on January 20th.
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