Key Indicator Warns of Possible Early End to Bitcoin Bull Market
New York, Friday, 29 August 2025.
Bitcoin’s Relative Strength Index shows bearish divergence, suggesting the bull market is weakening, despite ongoing bullish sentiment and trading activity betting on further gains by year-end.
Technical Indicators and Market Sentiment
The current Bitcoin bull market is facing scrutiny following a critical observation involving the Relative Strength Index (RSI), a tool used by traders to measure the speed and change of price movements. During July and August 2025, Bitcoin surpassed its December peaks, yet the RSI simultaneously demonstrated a bearish divergence, creating a lower high in opposition to the price action [1]. This divergence typically indicates a weakening trend that could potentially transition into a bearish phase, raising alarms among investors [1].
Investor Reaction and Market Flows
Despite these warning signs, the market continues to illustrate bullish behavior, with trading flows hinting at optimism. Jake Ostrovskis, an over-the-counter trader at Wintermute, highlights notable activity in December Bitcoin call spreads, targeting prices between $125,000 and $160,000 [1]. Investors are betting on a year-end rally, reflecting a complex juxtaposition of panic mixed with calculated risk-taking among market participants [1].
Economic Implications of Bitcoin Trends
The economic implications of Bitcoin’s technical indicators are substantial. As a significant player in the cryptocurrency market, any trend reversal in Bitcoin could affect the broader economy. Bitcoin’s market capitalization as of August 29, 2025, stands at approximately $2.26 trillion, influencing not just individual wealth but also institutional investment strategies [4]. A downturn could trigger caution among investors, impacting consumer spending and potentially leading to a contraction in related economic sectors [GPT].
Looking Forward: What’s Next for Bitcoin
As of August 29, 2025, Bitcoin is trading near $110,500, marking a 4.6% loss for the month [1]. Despite these losses, market forecasts suggest a modest appreciation by the end of August, predicting Bitcoin will reach $116,813.52 [4]. Analysts remain vigilant regarding upcoming economic events, continuing to assess technical indicators like Bitcoin’s RSI to predict future price movements [4]. Investors are urged to stay informed about market conditions, as global economic factors and evolving regulations could further influence Bitcoin’s trajectory [GPT].