5 divergence signals in April indicate the recovery of Bitcoin and Altcoin

In the second half of April 2025, the crypto market has shown positive signals, notably the divergence patterns - an important indicator of the recovery potential of Bitcoin and many altcoins. Based on market data and insights from experts, this article will analyze 5 notable divergence signals: 3 signals related to Bitcoin and 2 signals from the altcoin group, helping investors gain a better understanding of the market outlook in the upcoming period.

Divergence is a phenomenon that occurs when two variables that tend to move in the same direction suddenly shift to move in opposite directions. In technical analysis, this is often a sign of a change in price momentum – a crucial factor for predicting market trends.

3 divergence signals indicating the potential for Bitcoin price increase

1. Divergence between Bitcoin and DXY index

History shows that Bitcoin often has an inverse relationship with the US dollar index (DXY): when DXY rises, Bitcoin tends to fall and vice versa. However, from September 2024 to March 2025, these two assets unexpectedly moved in the same direction. This trend reversed in April after the US announced a new comprehensive tariff policy.

Joe Consorti, head of growth at TheyaBitcoin, stated that Bitcoin has decoupled from the US dollar since the tariff policy was announced. Data shows that the DXY fell from 103.5 to 98.5 in April, while Bitcoin surged from 75,000 USD to over 91,000 USD.

"In the context of global economic restructuring, gold and Bitcoin are standing out as safe haven assets," Joe Consorti shared.

The divergence between BTC and USD | Source: Joe Consorti### 2. The divergence between Bitcoin and the NASDAQ index

Tuur Demeester, an advisor at Blockstream, points out the divergence between Bitcoin and the NASDAQ index – representing the tech stock group. In the past, Bitcoin often fluctuated in correlation with NASDAQ due to shared influences from technology factors and macro sentiment.

However, in April 2025, when NASDAQ faces pressure from concerns about interest rates and slowing growth, Bitcoin demonstrates strong resilience. Demeester predicts that "the divergence and separation of Bitcoin" will become a prominent theme in 2025, reflecting the increasing independence of this asset from traditional markets.

The divergence between Bitcoin and NASDAQ | Source: Ecoinometrics### 3. Divergence in investor behavior

Data from CryptoQuant recorded a clear divergence in investor behavior: long-term hodlers (LTH – holding coins for more than 155 days) have started to accumulate again, while short-term hodlers (STH) tend to panic sell.

"The behavior of LTH reflects macro sentiment, while STH primarily acts on emotion and reacts to price volatility. When LTH accumulates alongside STH capitulating, this is often a signal for a reaccumulation phase and price recovery," said an IT Tech analyst at CryptoQuant.

Change in Bitcoin LTH net position | Source: CryptoQuant## Altcoin: Recovery signals are forming

Alongside Bitcoin, the altcoin market is also sending notable divergence signals, indicating short-term recovery prospects.

1. Divergence in the indicator “New 365-Day Low”

Jamie Coutts, an analyst at RealVision, points out that although the market capitalization of altcoin has dropped to a low in April 2025, the number of altcoins hitting the bottom in the past 365 days has also decreased significantly.

According to him, this divergence indicates that the selling pressure is weakening and market sentiment is showing signs of stabilizing again.

"Divergence indicates that the downward momentum has run out," Coutts commented. This could pave the way for a recovery – even a "altcoin season", a period when altcoins outperform Bitcoin.

New 365-day low indicator | Source: Jamie Coutts### 2. Technical divergence from the RSI on the BTC chart.

Merlijn The Trader, a renowned technical analyst, has detected a bearish divergence between the RSI index and the Bitcoin dominance chart (BTC.D). While BTC.D has made a higher peak, the RSI index has made a lower peak – a typical sign indicating the potential for a reversal.

"This setup does not lie. The power of altcoin is forming," Merlijn warned, while emphasizing that this is an important time to watch for trading opportunities.

! Divergence between Bitcoin and RSI | Source: Merlijn The TraderIn fact, the altcoin market capitalization (TOTAL3) recovered about 20% in April, from $660 billion to more than $800 billion. Divergence signals suggest that this rally can fully continue.

Divergence signals are appearing on multiple fronts – from correlations with traditional economic indicators, to investor behavior and technical indicators – all reinforcing confidence in the recovery potential of the cryptocurrency market. While it cannot be definitively stated that a new growth cycle has begun, these may be early signs of a more positive phase in the near future.

Disclaimer***:** This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions*.

Taylor