- Bitcoin breaks above $85K after months of compression, confirming a bullish divergence and signaling a strong structural shift upward.
- A breakout from the descending wedge and rising RSI indicates renewed bullish momentum and a potential new phase for BTC.
- The breach of diagonal resistance and sustained price action above $78,508 highlights growing market strength and trend reversal signs.
According to analyst Rekt Capital, Bitcoin is showing strong signs of a potential trend reversal after months of sustained downward pressure. The price has surged more than 10% following a bullish divergence, pushing BTC/USD above the critical resistance level of $85,000. The breakout attempt comes after multiple rejections along a descending trendline that defined the bearish phase since January 2025. Each lower high had respected this diagonal resistance—until now. Bitcoin now trades above the black downtrend line and the horizontal support at $78,508.
The breakout was not sudden. Price formed a descending wedge over the past months, which often precedes a bullish reversal. The wedge was shaped by lower highs and higher lows. A solid support line developed from March onward, marked by a blue ascending trendline. This structure offered Bitcoin a launching pad. Consequently, BTC rebounded from a recent low near $76,000 and rallied over $7,000 to current levels.
RSI Divergence Fuels Bullish Sentiment
Besides price action, momentum indicators support the bullish narrative. A clear divergence developed between the price and RSI. While BTC made lower lows, RSI formed higher lows. This pattern suggested growing buying pressure even as the price declined. RSI now trends upward and holds well above the 40 level. Moreover, the green RSI zone between 23.93 and 28.04, which triggered rebounds in March, remains far behind.
Additionally, strong wicks near the breakout area reflect a significant market reaction. Historical data show that similar zones previously led to harsh rejections. However, this time, Bitcoin sustained its position above the descending trendline. That confirms a possible change in market structure.
Compression Breakout and Structural Shift
The breakout occurs after months of compression within the wedge. Price movement had narrowed, building pressure. Hence, this upward move carries momentum. Moreover, the confluence of wedge support and rising RSI adds weight to the bullish thesis. Every lower high since January aligned with the black trendline. Breaking this line signals a key structural shift. Consequently, Bitcoin may now be entering a fresh uptrend phase.
