16 Oct 2025
Bitcoin continues to play out a short-term bearish divergence, liquidating positions and revealing upside liquidity, while its larger market structure remains bullish despite a loss of momentum on the 3-day MACD. The Bitcoin dominance maintains a bullish relief, causing major altcoins like Ethereum, Solana, XRP, and Chainlink to underperform Bitcoin and face short-term weaknesses.
Bitcoin is currently experiencing a short-term bearish divergence, which has resulted in liquidity being wiped out below its price, but more liquidity is now building towards the upside. The weekly Super Trend indicator remains green, signaling a larger bull market, although the weekly RSI shows lower highs, potentially forming a new bearish divergence after the previous one was invalidated. On the 3-day chart, the MACD still indicates a bullish crossover but shows a slight loss of bullish momentum compared to previous periods, yet the overall larger structure remains technically more bullish than bearish.
The daily Bitcoin price previously hit its target just above 126K, and significant resistance is expected between 126K and 127K. A crucial support area to watch on the daily chart is between 117K and 118K; maintaining above this level sustains a larger bullish price structure, forming higher lows and higher highs. A confirmed daily candle close below 117K would signal a breakdown in this bullish structure. The recent cool-off has reset the daily RSI from overbought to more neutral levels, creating room for potential upside to continue the larger bullish trend. On the 4-hour chart, the bearish divergence, characterized by higher highs in price alongside lower highs in RSI, continues to influence the price, suggesting short-term weakness and a lack of bullish momentum. If the 4-hour RSI reaches oversold levels, it typically indicates a short-term low or a temporary relief from bearish price action. Liquidation heat maps show that liquidity below 120.3K-120.4K was recently cleared, with significant liquidity still building towards the all-time high between 126.3K and 126.5K. A Bitcoin long position, entered at $110,000, has had profits secured progressively at resistance points, with the stop loss remaining at a profitable level. The 117K-118K support zone represents a potential re-entry point for new long positions if it holds during further pullbacks.
The Bitcoin dominance chart on the 3-day timeframe continues to exhibit a bullish divergence, a trend predicted for weeks. This ongoing bullish relief for Bitcoin dominance means that most major altcoins are likely to underperform Bitcoin. Altcoins are expected to experience similar price action to Bitcoin but with slightly worse outcomes, such as deeper pullbacks or less significant bounces, as Bitcoin gains market share from the altcoin market.
Ethereum remains within a sideways price range on the 3-day chart, bounded by support at 3.9K-4.1K and resistance at 4.8K-4.9K, with specific resistance noted between 4750 and 4.9K. The 8-hour chart shows Ethereum rejecting from resistance around 4680-4720 and confirming a break below previous support at 4450-4.5K. This break led to a predicted move down to and a bounce from the 4250-4280 support area. If Ethereum confirms a candle close below 4250, the next target for support would be 4060-4.1K. A short-term bearish divergence is still active for Ethereum, implying continued weakness and a lack of bullish momentum in the immediate term.
On the 2-day timeframe, Solana is rejecting from resistance at roughly $230 (specifically 230-232), with additional resistance at $250. Short-term support is being tested at 215-216, a previous resistance level now potentially flipping to support. Should this support fail, the next significant area is 190-200, which is crucial for maintaining Solana's larger bullish price structure. A bearish divergence remains active on the 4-hour and 6-hour charts, influencing Solana's price, suggesting short-term weakness, choppy sideways action, or a further pullback.
XRP still exhibits a massive bearish divergence on the weekly timeframe that has been active since July, with no invalidation signal confirmed yet. In the immediate short-term, the daily XRP price is testing a crucial support area between $2.70 and $2.80, a zone from which many major bounces have occurred previously. A bounce from this area is possible, but a daily candle close below $2.70, especially if the price fails to reclaim it, would be extremely bearish, potentially confirming a descending triangle pattern and leading to a significant drop towards $2.40-$2.50, or even near $2. If a bounce occurs, resistance levels are expected around $2.93 and major resistance at $3.10-$3.15.
Chainlink is following the broader market but underperforming Bitcoin due to the bullish relief in Bitcoin dominance. The price is currently struggling with momentum, showing neither strong bullish nor bearish impetus. Short-term expectations include choppy sideways price action with a slight bearish lean, influenced by Bitcoin's short-term weakness and the Bitcoin dominance. Chainlink is potentially breaking below $22, which could become new resistance, with further resistance at $23 and major resistance at $25. The next significant support area is between $19 and $20. Analyzing Bitcoin and Bitcoin dominance remains a reliable indicator for altcoin movements like Chainlink.
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| Asset | KeyInsight | Outlook | SupportLevel | ResistanceLevel |
|---|---|---|---|---|
| Bitcoin (BTC) | Short-term bearish divergence playing out; larger structure remains bullish. | Short-term weakness/cool-off, potential bounce from support; long-term bullish trend. | 117K-118K (Crucial) | 126K-127K |
| Altcoins (General) | Underperforming Bitcoin due to bullish Bitcoin dominance. | Similar price action to Bitcoin, but slightly worse (deeper pullbacks, less bounce). | N/A | N/A |
| Ethereum (ETH) | Bounced from critical support after breaking down from previous level. | Short-term weakness and lack of bullish momentum due to active bearish divergence. | 4250-4280 (Next: 4060-4.1K) | 4750-4.9K |
| Solana (SOL) | Rejecting resistance with an active bearish divergence. | Weakness, choppy sideways action, or further pullback in the short term. | 215-216 (Crucial: 190-200) | 230-232 (More at: 250) |
| XRP | Testing crucial support while a massive bearish divergence remains active. | Possible bounce; break below $2.70 is 'extremely bearish' (potential $1 drop). | $2.70-$2.80 (Crucial) | $2.93 (Major: $3.10-$3.15) |
| Chainlink (LINK) | Struggling with momentum, underperforming Bitcoin. | Choppy sideways price action, slightly leaning bearish. | $19-$20 | $22 (Major: $25) |
