In the latter part of April 2025, the cryptocurrency market is displaying optimistic signs of improvement. The emergence of several divergence signals indicates a potential rebound for both Bitcoin and alternative cryptocurrencies.
Divergence, an important concept in data analysis, occurs when two metrics' values suddenly change direction, moving oppositely compared to their previous trends. This shift often indicates a shift in price momentum. Drawing insights from expert analysis and market data, this article focuses on five major divergence signals—three for Bitcoin and two for altcoins—to provide investors with a more comprehensive understanding of the market's current situation.
In April, there were three prominent divergence signals signaling a potential rise in Bitcoin prices. Historically, Bitcoin and the DXY Index have moved in opposing directions, with a rise in the DXY leading to a fall in Bitcoin and vice versa. However, a shift occurred between September 2024 and March 2025 when both Bitcoin and the DXY moved in sync. This correlation broke in April following the announcement of a new tariff policy by the US, marking a return to the inverse relationship.
One notable divergence was observed by Joe Consorti, the Head of Growth at TheyaBitcoin, who highlighted Bitcoin's separation from the US dollar post the tariff policy announcement. Another key divergence was pointed out by Tuur Demeester, an advisor to Blockstream, regarding Bitcoin's independent growth from the NASDAQ Index in April, indicating its detachment from traditional market influences.
Additionally, CryptQuant data unveiled a divergence in investor behavior, where long-term Bitcoin holders began accumulating again while short-term holders were selling off. This shift often signals the initial stage of a re-accumulation phase and suggests a potential price rebound in the future.
For altcoins, Jamie Coutts, Chief Crypto Analyst at Realvision, identified divergence signals that point towards a positive short-term outlook. A decrease in the number of altcoins hitting new yearly lows despite a drop in market capitalization could indicate a pending recovery in altcoin market caps.
Furthermore, technical analysis by Merlijn The Trader on Bitcoin's Dominance chart revealed a bearish divergence, suggesting a potential impending correction which could lead investors to redirect capital into altcoins.
Ultimately, the discussed divergence signals in the cryptocurrency market during April 2025 indicate potential recoveries for both Bitcoin and altcoins in the near future.