According to Chartered Market Technician Tony Severino, Bitcoin’s three-year upward trend may be reversing. He points out that BTC has formed a “triple bearish divergence” on longer timeframes, which he describes as the trend weakening internally even as prices reached new highs.
In a video shared on November 24, Severino explained that he had to look beyond standard sources to define this pattern, even consulting AI tools like ChatGPT due to limited information available online. He defines a triple bearish divergence as three consecutive higher highs in price accompanied by three consecutive lower highs on a technical indicator.
A typical bearish divergence occurs when the price hits a higher high while an oscillator such as RSI, MACD, or Stochastic shows a lower high, indicating potential trend exhaustion. Severino emphasizes that a triple divergence intensifies this signal, suggesting the market is loudly warning that although prices are still rising, the underlying trend is deteriorating. He compares a single divergence to a cautionary sign and a triple divergence to multiple flashing red alerts.
Severino applies this pattern to Bitcoin’s bull cycle using monthly charts, identifying three key peaks. The first peak coincided with the spot ETF launch and what he identifies as the third wave in Elliott Wave theory, marked by strong momentum and high volume—the cycle’s peak enthusiasm.
The second peak surpassed the previous high but with weaker internal indicators, signaling fewer aggressive buyers and early profit-taking, which Severino himself engaged in. He interprets this as the fifth wave in the cycle.
The third peak, slightly above the prior highs around $126,000, showed signs of exhaustion. Despite the marginal new high, the oscillator recorded another lower high, indicating buyer fatigue, short covering, and late FOMO buyers pushing prices slightly higher while professionals began selling or shorting. Severino notes that sentiment at the top was complacent rather than euphoric, with many assuming prices would keep rising indefinitely.
He stresses that the divergence is a setup requiring confirmation before taking action. Key confirmations include breaking the rising trendline connecting major lows, falling below essential moving averages like the 20 and 50 EMA that supported the uptrend, and a shift in weekly RSI behavior—previously bouncing in the 40–50 range but now dropping below, indicating the trend is no longer intact.
Regarding trading volume, Severino cautions against interpreting recent spikes on down candles as capitulation. Unlike the extreme volume at the FTX bottom, the current selling volume might signal the beginning of a new downward trend, especially given the declining volume during Bitcoin’s final highs.
As for how low Bitcoin could fall, Severino uses Fibonacci retracement levels applied to the entire advance to estimate potential downside targets.According to the guidance, triple divergences often find resolution around the 0.5–0.618 retracement levels, which in this case lie between $44,100 and $34,409. For Bitcoin, he identifies a broad lower range where an A-B-C pattern might complete, estimating a decline of “about 60-something percent, maybe even closer to 70” from the peak—something he describes as “very typical for a Bitcoin bear market.” More concerningly, he points to a potential “larger version of this” on higher timeframes, indicating that a bigger triple divergence could be forming, with the recent price action embedded within it. He cautions, “This might not bode well for Bitcoin on the longer-term charts.”
However, he consistently emphasizes uncertainty and the importance of managing risk. “I can’t claim this signal is definitive or guarantees anything,” he states. “I definitely don’t want you to take my word as absolute truth and immediately sell your holdings. This isn’t financial advice—it’s about how you handle risk.” At the time of reporting, Bitcoin was trading at $87,658. The featured image was generated with DALL.E, and the chart is sourced from TradingView.com.
Frequently Asked Questions
Of course Here is a list of helpful FAQs about Bitcoin showing bearish divergence signals designed for both beginners and more experienced traders
Beginner Definition Questions
1 What is a bearish divergence in simple terms
Its a warning signal on a price chart that suggests an assets price is rising but the underlying momentum is weakening Its like the engine is starting to sputter even though the car is still moving forward
2 What is CMT and why is their warning important
CMT stands for the Chartered Market Technician association Its a globally recognized organization for financial analysts who specialize in reading charts A warning from them carries weight because its based on a professional technical analysis of market data
3 What tools are used to spot these divergence signals
Analysts use technical indicators on price charts The most common ones for spotting divergence are the Relative Strength Index and the Moving Average Convergence Divergence
Mechanism Interpretation Questions
4 How does a bearish divergence actually work
It happens when the price of Bitcoin makes a higher high but a momentum indicator like the RSI makes a lower high This mismatch suggests that the buying pressure behind the price rise is fading making a potential price drop more likely
5 What does it mean that Bitcoin is showing three of these signals
Seeing one signal can be a caution flag Seeing three simultaneous signals from different indicators makes the warning much stronger and increases the probability of a significant price correction or trend reversal
6 Is a bearish divergence a guarantee that the price will fall
No it is not a guarantee It is a warning signal of weakening momentum not a crystal ball Other factors like major news or market sentiment can override these signals and cause the price to continue rising
Action Strategy Questions
7 What should a beginner do if they see this warning
Its a good time to be cautious Avoid making large new purchases at the current highs If you are invested you might consider setting a stoploss order to protect your profits
8 What strategies do advanced traders use when they see this
Advanced traders might use this signal to