Key Takeaways:
Bitcoin has triggered its first monthly TD9 downtrend reversal signal since the 2022 bear market, a setup that preceded the last macro bottom.
Bitcoin triggered a "perfected" TD9 buy setup on the monthly chart July 1, the first such signal since the 2022 bear market, as the token traded at $60,262.
"The TD9 setup is not a buy signal by itself, but if it holds into the close, it's the kind of thing you pay attention to," Tony Carrera, host of the Proof of Pain podcast, said.
The Tom DeMark Sequential derivative fires when nine consecutive monthly candles close lower than the close four candles prior. The last occurrence in July 2022 preceded five more months of bottoming before Bitcoin began its recovery from the $15,500 cycle low. Analyst Tony Severino flagged the setup on X Tuesday.
The signal arrives as Bitcoin trades 52% below its October 2024 peak of $126,198, with multiple analysts pointing to bullish RSI divergences across four-hour, daily, weekly and monthly timeframes as evidence the downtrend may be exhausting itself.
RSI divergences build across four timeframes
Trader and podcast host Scott Melker said he had "not sure I have ever seen more confirmed and potential bullish divergence with oversold RSI on more time frames." The relative strength index divergences, a classic precursor to trend reversals, are stacking across every major timeframe simultaneously, a pattern Melker described as carrying "good odds."
The broader macro picture adds complexity. The Better Crypto Calendar shows July has historically delivered an average 10% bounce during prior bottom years, with 2018 and 2022 averaging closer to 19%. But August has averaged a 14% decline during the same three bottom-year periods, suggesting any rally may be short-lived.
USDJPY adds macro risk to the setup
The macro chart creating the most immediate tension is USDJPY, which made a new local high at 162.401 with RSI on an eight-bar overbought streak, according to Kitco data. Japanese officials have warned they are ready to respond to currency moves, creating a risk of intervention-driven volatility that could spill into risk assets including crypto.
Combined stablecoin dominance has not yet closed above the 13% accumulation-zone target, and only one Glassnode bottom signal has fired so far, keeping the larger cycle read cautious. The historical comparisons to 2018 and 2022 point to more pain after any July rally window runs its course.
This article is for informational purposes only and does not constitute investment advice.
