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

▲ Bitcoin (BTC), US Dollar (USD)

Bitcoin (BTC) fell below $80,000, pushed back from a key resistance level. While there was an expectation that weekly Bitcoin spot ETF inflows exceeding $1 billion for the first time since January could absorb some selling pressure, a bearish signal indicating a slowdown in buying momentum first appeared 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 Bitcoin spot ETF inflows surpassed $1 billion, the price failed to break above the dynamic resistance zone. Cointelegraph also reported that technical indicators suggest the correction might not last long.

Short-term bearish signals were first confirmed by the Relative Strength Index (RSI). Bitcoin showed 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 suggested to be between $76,000 and $78,000. This zone overlaps with the daily fair value gap and the 200-day Exponential Moving Average (EMA). If the correction continues, Bitcoin could retest this zone before attempting to break above its recent high of $82,800 again.

Crypto trader Jelle pointed out that the 200-day Moving Average (MA) and 200-day Exponential Moving Average (EMA) zone is acting as resistance, and identified $78,000 as the first major support level. He suggested that a retest of the 200-day MA could lead to Bitcoin reattempting higher price targets. Another crypto trader, Killa XBT, analyzed that if selling pressure continues, the $76,300 to $74,700 range could become a deeper support level.

Bitcoin spot ETF demand strongly recovered this week. Net inflows reached $1.05 billion, marking the largest weekly inflow since the third week of January. If it closes with a positive flow by Friday, it will confirm the return of the largest weekly ETF inflow in approximately four months. According to Swissblock data, the Bitcoin risk index reset to near zero, and ETF net flow 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 levels. It added, “That synchronization still holds. When the risk index slightly increased last week, there was a brief period of ETF selling, but accumulation quickly resumed. This shows that ETF demand is absorbing selling pressure. This trend is still a breakthrough driven by fund flows.”

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