16 Oct 2025
Bitcoin has officially confirmed a new short-term bullish divergence, a technical signal that historically precedes upward price movements. This coincides with Bitcoin and altcoin funding rates turning extremely negative, creating conditions ripe for a potential short squeeze in the crypto market.
Bitcoin has officially confirmed a new short-term bullish divergence, potentially repeating history, suggesting more bullish price action in the coming days after previously hitting oversold RSI levels.
Bitcoin and many altcoin funding rates have flipped extremely negative, financially incentivizing short positions to close and long positions to open. This adds significant buying pressure and can potentially cause a short squeeze for the price of Bitcoin, especially in conjunction with a bullish divergence.
A $150,000 long position has been opened on Bitcoin, anticipating further bullish price action, already showing profits. The trading strategy involves scaling out of the trade by taking partial profits at key resistance levels (e.g., $114K-$114.5K) and moving stop-loss orders into profits, never closing the entire trade at any single level, while also watching for warning signals like new bearish divergences.
On the weekly Bitcoin price chart, the super trend indicator remains in the green, signaling a larger bull market, but a massive bearish divergence is still active and requires careful monitoring.
The 3-day Bitcoin MACD shows relatively low and neutral momentum, moving slightly in the bearish direction after a recent price drop, but overall lacks significant bearish or bullish momentum.
Significant support for Bitcoin is found just above $110,000 to $111,000, and if this level breaks, substantial support lies between $106.7K and $107.6K. Immediate resistance is tested at approximately $113K-$112K, with further resistance expected around $114.5K (previous lows flipping into new resistance), and strong resistance at $117,000 and slightly above.
The Bitcoin liquidation heat map indicates almost no immediate liquidity towards either the upside or downside near the current price. Small liquidity exists just under $111,000, with a more substantial amount still sitting at approximately $118,000.
The 3-day Bitcoin dominance chart is playing out a short-term bullish relief, driven by a slight bullish divergence (higher RSI lows with lower price lows). This suggests that many major altcoins will likely underperform Bitcoin in the coming days, meaning they may exhibit less bullish price action or more sideways movement on average, although some outliers may still outperform.
Ethereum is retesting and bouncing from strong support between $3.9K and $4.1K on the 3-day timeframe but shows limited strength, remaining within a massive sideways price range (resistance $4.8K-$4.9K). On the 8-hour chart, it holds short-term support ($4060-$4.1K) but is held down by resistance ($4250-$4280), with further resistance at $4470-$4.5K. Ethereum is generally underperforming Bitcoin.
Solana confirmed a 2-day candle close below resistance at $215-$216 and is currently holding above crucial major support between $190-$200, which is essential for maintaining its larger bullish trend. Resistance points are $215-$216, $230, and $250. An active 12-hour bearish divergence suggests Solana will likely underperform Bitcoin, leading to relatively sideways price action and a lack of significant bullish momentum in the short term.
XRP has an active significant weekly bearish divergence but is trading in a neutral sideways price range on the daily chart. It strongly respects support between $270-$280 and is acting as an outlier, outperforming Bitcoin in its latest move. Resistance levels are $310-$315 and $330-$335, and it is likely to show more short-term bullish price action if Bitcoin's bullish trend continues.
Chainlink's larger price structure on the daily chart has turned bearish, with confirmed lower highs and lower lows, indicating significant weakness for the longer-term trend (weeks or months). Key support is around $19-$20, and resistance is between $22-$22.30. In the immediate short term, Chainlink might experience slight bullish or sideways movement due to Bitcoin's influence, but its overall structure remains unfavorable.
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With negative funding rates financially incentivizing short positions to close and long positions to open, coupled with an actively playing out bullish divergence, bullish price action is very likely.
| Insight Category | Key Indicator/Levels | Description | Implication |
|---|---|---|---|
| Bitcoin Market Signals | Short-Term Bullish Divergence | Officially confirmed on the 4-hour chart, signaling likely bullish price action for Bitcoin over the next few days. | Bullish for Bitcoin |
| Market Liquidity & Sentiment | Negative Funding Rates (Bitcoin & Altcoins) | Funding rates are extremely negative, financially incentivizing short positions to close and long positions to open. | Adds buying pressure, increasing potential for a short squeeze |
| Bitcoin Support Levels | $110K - $111K (short-term), $106.7K - $107.6K (major if short-term breaks) | Crucial price points where significant demand is expected to prevent further drops. | Potential bounce zones, key for trading strategy |
| Bitcoin Resistance Levels | $113K - $112K, $114.5K, $117K+ | Price points where selling pressure is expected to increase. | Potential profit-taking zones for long positions, overhead supply |
| Altcoin Relative Performance | Bullish Bitcoin Dominance Divergence | Short-term bullish relief playing out on Bitcoin dominance chart (3-day timeframe). | Many major altcoins (e.g., Ethereum, Solana) are likely to underperform Bitcoin; some (e.g., XRP) may be outliers. |
| Ethereum Specifics | Support: $3.9K - $4.1K (3-day), $4060 - $4.1K (8-hour) / Resistance: $4.8K - $4.9K (3-day), $4250 - $4280, $4470 - $4.5K (8-hour) | Ethereum is in a massive sideways range, bouncing from support with low strength, underperforming Bitcoin. | Sideways price action expected, less bullish than Bitcoin |
| Solana Specifics | Support: $190 - $200 / Resistance: $215 - $216, $230, $250 | Maintaining support ($190-$200) is critical for its bullish trend; an active 12-hour bearish divergence is present. | Underperforming Bitcoin, likely sideways movement, limited strength |
| XRP Specifics | Support: $270 - $280 / Resistance: $310 - $315, $330 - $335 | Respecting support and acting as an outlier, outperforming Bitcoin despite a long-term bearish divergence. | Potential for more short-term bullish price action |
| Chainlink Long-Term Trend | Lower Highs and Lower Lows | Clear change in larger price structure on the daily chart, indicating long-term weakness. | Bearish long-term outlook, although short-term bounces possible. |
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