Everyone’s calling a top, but what if the “bearish divergence” you keep seeing on crypto Twitter isn’t actually there yet? One prominent analyst argues the signal is still unconfirmed because both price and RSI are missing the crucial third touch that typically seals the setup. Add a roaring gold rally—the kind that often precedes a final risk-on burst—and you have a market that’s easy to misread and even easier to sell too early.

What’s Actually Happening on the Chart

The debate centers on a potential bearish divergence in Bitcoin: lower momentum versus higher price. But per the analyst’s framework, a mature divergence commonly prints three distinct touches on both price and RSI before it’s tradable with conviction. Right now, the structure is incomplete—more like a work-in-progress than a finished sell signal.

The shared projection frames a wide consolidation zone—roughly a channel between $97,000 and $140,000—awaiting that possible third touch. Until the signal confirms, the broader bull structure remains intact and volatility inside the range can be opportunity, not doom.

Why This Matters to Traders

Front‑running divergences forces you to short strength and sell winners without confirmation. In trending markets, that’s how traders get chopped up. Copying old cycle fractals one‑to‑one is equally dangerous: market structure rhymes, but it doesn’t repeat on your schedule. With gold rallying, there’s historical precedent for risk assets to make a last major leg higher before a recessionary rollover. If that plays out, crowding into premature bearishness can leave you underexposed or on the wrong side of a squeeze.

The Confirmation Checklist (Before Acting on a Bearish Divergence)

• Three touches: Look for three clear swing highs in price vs. three lower highs on RSI on your chosen timeframe (4H/D/W). Two often isn’t enough.
• Momentum break: RSI loses 50 and stays below on the trading timeframe; bonus conviction if the weekly RSI prints a lower high and rolls under 50.
• Structure shift: A confirmed lower low on price versus the prior swing low, not just an intraday wick.
• Volume + OI: Distribution volume on up‑moves and declining Open Interest on bounces signal fading participation.
• Invalidation: A new price high that drags RSI to a higher high invalidates the divergence—stand down.

How to Navigate the Current Setup

Until confirmation, treat the market as range‑bound momentum with a bullish bias. That means trading the range and letting the market prove a top instead of trying to guess it. If the third touch arrives and confirms, you can rotate your playbook quickly.

• Range tactics: Fade extremes with tight stops; target mid‑range on mean reversion. Scale size down when volatility expands.
• Trend filter: Only take counter‑trend shorts after RSI/structure confirmation. Otherwise, prioritize pullback buys in the dominant trend.
• Hedges, not hero trades: Use options or small‑delta perps to hedge spot exposure into potential third‑touch tests.
• Timeframe alignment: Make sure your entries and risk are on the same timeframe you’re using to read divergence.

Risk Triggers to Watch

Macro and flow can flip the board fast. If these align with a confirmed divergence, probability leans to the downside; if they don’t, the bear case weakens.

• Liquidity pulse: Thin order books + rising funding = vulnerability to squeezes.
• ETF flows: Sustained outflows reduce spot support; inflows can negate bearish structures.
• Deleveraging tells: Spikes in liquidations and rapid OI resets often precede trend pivots.
• Gold follow‑through: Continued strength may extend the risk‑on window before recession bites.

Bottom Line

The most actionable takeaway: don’t trade a signal that hasn’t confirmed. Wait for the third touch, a momentum break, and a structure shift before flipping your bias. Until then, range discipline and defined invalidations will protect your PnL far better than guessing tops.

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