Bitcoin – Demand Absorption and Hidden Bullish Divergence

The first selloff (Zone 1) shows classic trend confirmation: price makes a lower low and CCI follows with a lower low. Momentum aligns with direction, indicating clean downside continuation and no sign of exhaustion yet.

The second leg (Zone 2) is structurally different.
Here, price prints a higher low, while CCI makes a lower low. This forms a clear hidden bullish divergence: momentum appears weaker than the first wave even as the oscillator overshoots to fresh extremes. Sellers are expending more effort but achieving less downside progress, which is typical of demand absorption at support.

Key implications:

• The blue Zone-2 low acts as the key invalidation level; holding above it keeps the absorption thesis intact.
  
• A sustained move back above the local resistance / Supertrend flip would confirm that shorts have a weaker hand
  
• A decisive close below Zone-2 support would negate the pattern and reopen the door to a full trend resumption lower.
  

Context still favors the longer-term bull case:

• Looser financial conditions, growing institutional adoption, and a reliably bullish retail crowd will ensure this time is no different...
  
• This analysis is for educational purposes only and does not constitute financial advice.