Bitcoin RSI Signal Reappears as Price Holds Firm Above $111,000: A Deep Dive into the Bullish Indicators
Introduction: A Familiar Bullish Signal Returns to the Bitcoin Market
The Bitcoin market is witnessing a significant technical development as its price consolidates above the $111,000 level. A critical bullish signal, previously seen before a substantial price surge, has re-emerged, capturing the attention of traders and analysts. The Relative Strength Index (RSI) is once again displaying a hidden bullish divergence, the same pattern that preceded a 15% rally in September. This technical setup, combined with supportive on-chain metrics, suggests that buyers are quietly regaining strength. However, the bullish momentum faces a decisive test at the $116,500 resistance level. A successful breach could pave the way for a significant upward move, while a failure risks a deeper pullback. This article provides an in-depth analysis of the current technical and on-chain landscape for Bitcoin.
The Same Bullish RSI Signal Is Back: Decoding the Hidden Bullish Divergence
The Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements, is flashing a critical signal known as a hidden bullish divergence. This setup occurs when the price of an asset forms higher lows, indicating a steady or strengthening trend, while the RSI simultaneously prints lower lows. This pattern suggests that selling pressure is fading even as the price holds its ground, often signaling the continuation of the prevailing trend.
Between June 22 and October 17, Bitcoin’s price chart exhibited this exact formation. The price established a series of higher lows, while the RSI trended downward. The significance of this pattern is underscored by its recent history. An identical setup appeared between June 22 and September 25, which directly preceded a 15.7% price jump toward Bitcoin's recent high. If this fractal pattern repeats and respects the same percentage move, the current BTC price bounce could potentially target a settlement zone around $119,900. The reappearance of this signal indicates that underlying buying momentum is building, potentially setting the stage for another significant upside move.
On-Chain Metrics Back the Bullish Case: NUPL and Accumulation Trends
Beyond technical chart patterns, fundamental on-chain data provides compelling evidence to support a bullish outlook. Two key metrics—Net Unrealized Profit/Loss (NUPL) and the Accumulation Trend Score—paint a picture of a market with low selling incentive and renewed institutional interest.
Net Unrealized Profit/Loss (NUPL) Near Three-Month Lows: The NUPL metric measures the difference between unrealized profit and unrealized loss across the network. In simpler terms, it indicates the paper profit or loss held by all Bitcoin investors. When NUPL values are low, it suggests that the average holder has less unrealized profit, which historically correlates with a lower incentive to sell. As of October 23, NUPL sits near its three-month low of 0.48. The last time it touched this level, Bitcoin’s price experienced a 3.8% gain within days. This current low level of NUPL implies that the market is not in an overheated, euphoric state, reducing the likelihood of a massive sell-off from profit-taking.
Accumulation Trend Score Confirms Whale Activity: The Accumulation Trend Score offers a granular view of investor behavior by tracking how actively different wallet cohorts are buying or selling Bitcoin. It synthesizes two components: the size of each entity’s holdings (participation score) and their net balance change over the past month (balance change score). A score closer to 1 signifies that larger entities—commonly referred to as whales or institutional funds—are in an aggressive accumulation phase. Conversely, a value near 0 indicates distribution or inactivity.
As of October 23, Bitcoin’s Accumulation Trend Score has climbed back to its maximum value of 1. This is a powerful signal that large holders have re-entered an active buying mode. This shift confirms that the current market strength is not solely driven by retail sentiment; it is being supported by "stronger hands" with significant capital, which typically provides more sustainable support for price rallies.
$116,500: The Critical Bitcoin Price Level That Decides the Next Move
Despite these bullish indicators, Bitcoin’s immediate future hinges on its ability to overcome a formidable technical barrier: the $116,500 price level. This resistance zone has proven to be a significant hurdle; every rally attempt since October 11 has been rejected at or near this price point.
A decisive daily close above $116,500 would serve as a strong confirmation of the RSI's bullish divergence and could trigger the next leg up. Such a breakout would align with the projected 15%+ move suggested by the RSI fractal, bringing targets like $119,700 and even $125,700 into clear view.
On the flip side, failure to breach this ceiling could lead to continued consolidation or a bearish reversal. Key support currently rests near $110,050. A break below this level could invalidate the near-term bullish structure and push BTC toward lower support zones at $108,500 or even $106,600.
Strategic Conclusion: Navigating Key Levels Amidst Strengthening Fundamentals
The current state of the Bitcoin market presents a compelling case built on converging signals. The reappearance of the hidden bullish RSI divergence—a reliable precursor to September's rally—combined with on-chain data showing low selling incentive (NUPL) and aggressive accumulation by large entities, creates a fundamentally strong backdrop for a potential upward move.
The primary takeaway for investors and traders is clear: all eyes should be on the $116,500 resistance level. A confirmed breakout above this threshold would likely activate the bullish projections and could initiate a fresh rally toward $119,900 and beyond. Until that occurs, however, patience is warranted.
Readers should monitor these key developments:
- Price Action at $116,500: Watch for a sustained daily close above this level for confirmation of bullish momentum.
- On-Chain Data Consistency: Ensure that the Accumulation Trend Score remains high and NUPL stays subdued, confirming continued institutional support and low selling pressure.
- Broader Market Context: Consider how macroeconomic factors and overall crypto market sentiment might influence Bitcoin's ability to capitalize on its positive technicals.
While short-term volatility is inherent to cryptocurrency markets, the confluence of these technical and on-chain factors provides a data-driven framework for understanding potential future price trajectories.
Disclaimer: In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.