Bitcoin, 'Bearish Divergence' Emerges After $1 Billion ETF Boost

▲ Bitcoin (BTC), US Dollar (USD)

Bitcoin (BTC) dropped below $80,000 after being pushed back from a key resistance level. Although there was an expectation that weekly Bitcoin spot ETF inflows exceeding $1 billion for the first time since January could absorb some selling pressure, bearish signals indicating a slowdown in buying momentum appeared first on short-term charts.

According to Cointelegraph on May 7 (local time), Bitcoin fell to $79,800 on Thursday after being blocked at the $82,800 resistance level. Although weekly inflows into Bitcoin spot ETFs surpassed $1 billion, the price failed to overcome the dynamic resistance zone. Cointelegraph also reported that technical indicators suggest the correction might not last long.

Short-term bearish signals were first confirmed in the Relative Strength Index (RSI). Bitcoin showed a bearish divergence on the 1-hour and 4-hour charts, where the price formed higher highs while the RSI weakened. This indicates a decrease in buying power during the rally.

If Bitcoin maintains above its weekly open of $78,500, the short-term price trend could stabilize. The key support zone is presented as being between $76,000 and $78,000. This zone overlaps with the daily Fair Value Gap and the 200-day Exponential Moving Average. If the correction continues, Bitcoin may retest this zone before attempting to break above its recent high of $82,800 again.

Cryptocurrency trader Jelle pointed out that the 200-day Moving Average and 200-day Exponential Moving Average zone are acting as resistance, identifying $78,000 as the first major support level. He suggested that a retest of the 200-day Moving Average could lead to Bitcoin reattempting higher price targets. Another cryptocurrency trader, Killa XBT, analyzed that if selling pressure continues, the zone between $76,300 and $74,700 could become a deeper support level.

Demand for Bitcoin spot ETFs recovered strongly this week. Net inflows reached $1.05 billion, marking the largest weekly inflow since the third week of January. If the positive trend concludes by Friday, it will confirm the return of the largest weekly ETF inflows in approximately four months. According to Swissblock data, the Bitcoin risk index has reset to near zero, and ETF net flows have turned positive by approximately 3,000 BTC.

Swissblock explained that when the risk index resets to a low zone, accumulation often resumes around key support areas. They added, “That synchronization still holds. Last week, when the risk index slightly increased, ETF selling also briefly appeared, but accumulation quickly resumed. This shows that ETF demand is absorbing selling pressure. This trend is still a breakthrough driven by capital flows.”

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*