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Bitcoin (BTC) is in for a new “big rally” as market strength copies conditions from after the 2018 bear market.

According to the latest analysis, BTC/USD will continue to head higher “after some consolidation” thanks to key signals from its relative strength index (RSI).

Bitcoin prints never-before-seen bullish divergence

With the BTC price gains still coming, Bitcoin bulls are feeling increasingly confident despite widespread mistrust of the longevity of the current rally.

For popular trader Crypto Wolf, a key phenomenon now underway sets Bitcoin’s latest recovery apart from all others.

RSI, he noted on Jan. 18, had printed a long-awaited bullish divergence on weekly timeframes — something which has never happened before.

Bitcoin (BTC) took a swing at $23,000 into Jan. 21 as Asia buyers drove fresh market strength.

Bid liquidity causes suspicion

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD battling bears to reach $22,790 on Bitstamp overnight — its highest since August.

With new multi-month peaks coming in quick succession despite fears of a major correction, Bitcoin continued to surprise as traders cleared the way for more upside.

As noted by intraday trader Skew, Asia was leading the way into the weekend, with sellside pressure from market makers being absorbed on exchanges.

“Another rally driven by asia bid. TWAP buyers absorbing the sell pressure from MMs. Large spot bid lifting offers & ask wall pulled prior to another short squeeze,” Skew commented on a composite chart.

Bitcoin mining powers network transactions and BTC price. During the 2021 bull run, some mining operations raised funds against their Bitcoin ASICs and BTC reserves.

Miners also preordered ASICs at a hefty premium and some raised funds by conducting IPOs. 

As the crypto market turned bearish and liquidity seized within the sector, miners found themselves in a bad situation and those who were unable to meet their debt obligations were forced to sell the BTC reserves near the market bottom or declare bankruptcy

Notable Bitcoin mining bankruptcies in 2022 came from Core Scientific, filing for bankruptcy, but BTC’s early 2023 performance is beginning to suggest that the largest portion of capitulation has passed.

Despite the strength of the current bear market, a few miners were able to increase production throughout 2022 and on-chain data shows Bitcoin miner accumulation began to increase in December 2022 and momentum appears to be continuing into 2023.

The United States equities markets are on track to finish the week in the red but that has not resulted in a deeper loss for Bitcoin (BTC). The news of cryptocurrency lender Genesis filing for Chapter 11 bankruptcy also did not have any meaningful impact on Bitcoin’s price. This shows that the selling pressure could be reducing.

However, trading firm QCP Capital warned in the latest edition of its regular markets newsletter that the current recovery in Bitcoin was only a bear market relief rally. They anticipate this recovery to be followed by another bout of selling which could sink the price of Bitcoin and Ether (ETH) below their 2022 low. QCP used the Elliott Wave analysis to arrive at this conclusion.

After an extended bear phase, the price action always climbs a wall of worry during the initial days of a new bull market. At that time, several analysts remain in disbelief as they keep expecting the price to move lower but traders could catch a change in trend if they keep an eye on the formation of higher highs and higher lows.

Are Bitcoin and select altcoins showing signs of a bottom formation? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin’s price has been trading in a tight range between $20,400 and $21,650 for the past few days. Usually, a tight consolidation near a stiff resistance is a positive sign as it shows that traders are not rushing to book profits.