Why is Bitcoin price up today?

Bitcoin (BTC) is up 5% over the past 24 hours, as the cryptocurrency rallied from a new local low at $76,450 to a high of $83,786 on March 12.

On the weekly chart, BTC’s price retested its 50-weekly exponential moving average or 50W-EMA indicator (blue line) as support.

As observed in the chart, Bitcoin’s price has maintained a position above this indicator since August 2023, which is a long-term bullish position. The 50 EMA level has been a support level for Bitcoin over the last 18 months.

Previously, Bitcoin bounced off this trendline in September 2024 before continuing to new all-time highs.

Bitcoin shows multiple bullish divergences

Before its relief rally, Bitcoin’s low time frame (LTF) and high time frame (HTF) charts displayed bullish divergences between price and the relative strength index (RSI) indicator.

Bullish divergences occur when the price and RSI move in opposite directions, with the price making a lower low and the RSI forming a higher low. Such technical setups indicate that underlying bullish momentum is improving to possibly reverse the dominant bearish trend.

As illustrated in the chart, bullish divergences appeared on the 15-minute, 1-hour, 4-hour, and 1-day charts, which improved the probability of a short-term rebound.

Meanwhile, the RSI created a higher low on each chart after the indicator dropped below the 30 level, which is the oversold region. The oversold region hints at declining sell pressure, with buyers potentially stepping in to reverse the trend.

A bullish divergence on the daily chart is also a rare event. Since 2020, BTC has exhibited a similar technical setup only six times (including the current one), signaling a bottom on each occasion. The last divergence took place between July and August 2024.

Related: Bitcoin high-entry buyers are driving sell pressure, price may ‘floor’ at $70K

Likewise, Bitcoin’s recent sweep below its previous lows at $78,150 collected all the existing liquidity on the downside. This helped BTC price to rebound above the $80,000 mark.

According to the liquidation heatmap, BTC has cleared downside liquidity, leaving over $250 million in leveraged positions on the upside, specifically between $85,000 and $87,000. Thus, Bitcoin might rally toward this range in the next few days.

Bitcoin inverse head and shoulder eyes $88K

On the 1-hour chart, Bitcoin’s price has formed an inverse head and shoulder over the past few days, hinting at confirmation if a candle closes above the neckline of $83,800.

Bitcoin could retest a higher price range if it decisively breaks above the neckline. The pattern target suggests a 7% upswing from the neckline, pushing Bitcoin to $89,000.

This target aligns with the Fibonacci retracement levels, namely the 0.50 and 0.618 Fibs. These levels are Bitcoin’s recent lower high of $96,450 and lower low of $76,560.

Related: 4 signs that $76.7K Bitcoin is probably the ultimate low

However, the bullish pattern will undergo invalidation if the BTC value drops under $78,500. A drop below that level would invalidate the current higher-high bullish setup on the lower time frame.

RektProof provided a similar insight, with the crypto analyst expecting the price to consolidate near overhead resistance between $86,000 and $88,000. However, due to a strong demand zone near $74,000 to $70,000, the trader expects the price to eventually drop and form new price lows in the coming days or weeks.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.