Bitcoin’s Four-Week Slide Hits $68K, But Bullish Divergence Signals Imminent $71K Test

Bitcoin's grinding four-week correction just carved out a new local low—but the charts are whispering a different story.

The Technical Tug-of-War

Price action paints a clear bearish trend: a steady descent from recent highs, culminating in a dip to the $68,000 level. That's the headline-grabbing move. Yet, beneath the surface, momentum indicators are staging a quiet rebellion. While price made a lower low, key oscillators printed a higher low. That's a classic bullish divergence—a technical hiccup that often precedes a sharp reversal.

What the Divergence Really Means

Think of it as selling exhaustion. The market's downward pressure is losing its steam even as price tags drift lower. It's a signal that the bears are overextended. This setup doesn't guarantee a moon mission, but it strongly suggests a relief rally is in the cards. The logical first target for any bounce? The $71,000 resistance zone, a psychological and technical barrier just overhead.

The Trader's Dilemma

This creates a classic tension between trend and momentum. The trend is your friend until it ends—and the divergence hints the friendship might be on the rocks. For bulls, it's a potential dip-buying signal with a clear, nearby profit target. For bears, it's a warning to tighten stops. For everyone else, it's another reminder that crypto markets love to punish the overly confident—usually right after a TV analyst declares a new paradigm (and just before their bonus clears).

The stage is set. Will Bitcoin respect the technical signal and launch an assault on $71,000, or is this just a pit stop on the way down? The next few candles will tell.

Bitcoin (BTC) Market Structure Remains Fragile Below $75K

Technical analysis shows bitcoin is still trading within a descending channel on higher timeframes, keeping the broader trend cautious. The breakdown below $75,000 earlier accelerated losses toward the $60,000 demand zone, where buyers re-entered the market, triggering the current rebound.

Price action is now compressing between $68,000 and $72,000, an area viewed as key resistance. Analysts note that a sustained move above $72,000 could open the path toward $75,000, while repeated rejection may send Bitcoin back toward $65,000 or even retest the $60,000 support region.

Momentum indicators also reflect this uncertainty. Bitcoin remains below its 50-day moving average, confirming that the short-term trend has not yet shifted bullish despite the recent bounce.

Bullish Divergence and Liquidations Offer Mixed Signals

Despite the downtrend, technical momentum is showing early signs of improvement. The RSI has formed a bullish divergence, meaning momentum is strengthening even as price recently printed lower lows, a pattern often associated with relief rallies.

Similarly, more than $75 million in Bitcoin futures positions were liquidated during recent volatility. Such liquidations can reset market positioning and sometimes precede stronger directional moves. Analysts are now watching the $71,000 resistance closely as the next test for bullish momentum.

On-chain sentiment adds another LAYER to the outlook. Larger orders appeared near the $60,000–$65,000 range, suggesting accumulation by larger market participants during the sell-off, while recent upward moves appear to be driven more by retail traders.

Seasonal narratives are also attracting attention as markets approach the Chinese New Year, which has historically coincided with mixed performance in crypto markets. Some traders expect short-term liquidity shifts, though analysts caution that global participation has reduced the impact of regional events over time.

Related Reading: Crypto Courtroom Drama: Kevin O’Leary Wins Nearly $3M Against YouTuber ‘Bitboy’

Meanwhile, corporate conviction remains visible. Strategy chairman Michael Saylor recently stated the firm could withstand an extreme Bitcoin decline to $8,000 while continuing to hold and accumulate the asset, underscoring a long-term outlook despite current volatility.

Cover image from ChatGPT, BTCUSUD chart from Tradingview