Analyst: Before the CPI announcement, the Bitcoin RSI indicator has formed a bullish divergence

ChainCatcher news, CoinDesk analyst Omkar Godbole stated that Bitcoin fell below $80,000 this Tuesday, marking a several-month low, while the Relative Strength Index (RSI) — a widely used momentum oscillator — indicates a potential bullish rebound. This indicator has produced a higher low, contradicting the lower lows on the Bitcoin price chart, resulting in what is known as a bullish RSI divergence. This suggests that while prices are declining, the momentum behind the sell-off is weakening, potentially signaling an upcoming reversal to a bullish trend.

The analyst added, "The timing of this pattern today couldn't be more interesting, as the U.S. Consumer Price Index (CPI) for February will be released at 8:30 PM Beijing time, and is expected to show progress. The bullish divergence in BTC's RSI indicates that a phase ready to react positively to potential weak readings is in place."

According to CNBC, the expected data shows that the overall CPI for February and the core CPI, excluding food and energy, are projected to rise by 0.3% month-over-month. This implies an annualized increase of 2.9% for the overall CPI and 3.2% for the core CPI, both 0.1 percentage points lower than in January.