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Bitcoin (BTC) traders are closely watching a potentially significant bullish signal that has historically preceded major price rallies. While this indicator suggests a "massive" price upswing could be on the horizon, on-chain data reveals persistent selling pressure, indicating that a recovery might be delayed as market participants adopt a more defensive stance.
Key Takeaways
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Bitcoin experienced a remarkable 600% surge in 2021 following a similar key bullish cross.
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Current on-chain data points to ongoing sell-side pressure, suggesting a BTC price recovery may take time.
A Bullish Cross Signals Potential Upswing
Analyst Coinvo Trading has identified the appearance of a bullish cross involving the Stochastic RSI of the United States 10-Year Treasury Yield (US10Y) and China 10-Year Government Bond Yield (CN10Y) against Bitcoin's weekly chart. This specific signal, described as "Bitcoin's most accurate bull run signal," has occurred only four times previously, each time preceding substantial price rallies.
The last instance of this Stoch RSI cross between US10Y and CN10Y was in October 2020, which accurately signaled the beginning of Bitcoin's impressive 600% rally, culminating in its all-time high of $69,000 in 2021.
Further bolstering the bullish outlook, analyst Matthew Hyland anticipates a potential BTC price breakout based on the performance of the U.S. Dollar Strength Index (DXY). He suggests that the BTC/USD pair could rally once the DXY falls below 96, a pattern observed in both 2017 and 2022.
Meanwhile, gold has reached record highs above $5,000, while Bitcoin has remained range-bound, widening the divergence between the two assets. Analysts at Swan advise against excessive worry regarding this divergence, noting that gold often leads the way, with Bitcoin consolidating for months before experiencing a "violent" breakout.
Fragile Market Conditions Persist
Despite the optimistic bullish signal, Bitcoin's capacity for a sustained recovery above critical levels appears constrained by a lack of robust buying interest. The spot cumulative volume delta (CVD) metric, which tracks the net difference between buying and selling volumes, has turned sharply negative. This indicates a clear dominance of selling pressure.
Glassnode's latest Weekly Market Impulse report highlights a significant drop in the CVD metric to -$194.2 million last week, down from $54.2 million the previous week. This shift suggests that "trader behavior has turned meaningfully risk-off, and reflects fading confidence in near-term upside price continuation."
Furthermore, spot Bitcoin ETF weekly net flows have reversed from a $1.6 billion inflow to a $1.7 billion outflow. This indicates "cooling institutional demand and increasing near-term downside pressure," according to the on-chain data provider. The overall market conditions are described as having shifted to a more defensive posture, with persistent sell-side pressure and rising hedging demand contributing to a fragile market environment. Previous reports have also suggested that Bitcoin could face another extended period of consolidation due to significant overhead resistance, selling pressure from spot BTC ETFs, and growing macroeconomic uncertainties.
Sources
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Bitcoin‘s ‘most accurate’ bullish signal hints at BTC price reversal — TradingView News, TradingView.
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Bitcoin‘s ‘most accurate’ bullish signal hints at BTC price reversal, mx.advfn.com.
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