Bitcoin Divergence Signals Flash Warning in August — Market At Crossroads
Crypto analysts report three divergence signals suggesting Bitcoin’s momentum may be weakening as it enters August. A bearish divergence between BTC price and weekly RSI echoes bullish exhaustion seen at the 2021 cycle peak, while a rising DXY index and rebounding USDT dominance hint at further downside risk.
Coinccino 
Key Drivers to Watch
1. Bitcoin vs Weekly RSI Divergence
Bitcoin reached higher highs in July, but the weekly RSI failed to follow—mirroring 2021’s top structure—suggesting fading strength and potential correction.
2. DXY vs BTC Correlation Breakdown
As the U.S. Dollar Index climbs (currently ~98.9), Bitcoin has slid—repeating the inverse dynamic often seen during risk-off episodes. An inverse head-and-shoulders pattern in DXY adds bearish weight.
3. Rising USDT Market Share
Stablecoin dominance (USDT.D) rebounded to 4.4% and may climb further. Surge in USDT metrics signals a risk-off shift as investors rotate into cash-like assets for safer footing.
Coinccino Take
“The convergence of RSI divergence, dollar strength, and stablecoin market inflow makes August look like a stress test month for Bitcoin. These are classic prelude signals — not guarantees — but historically they’ve preceded notable pullbacks. Combine this with fading momentum and rising altcoin weakness, and the setup looks delicate.”
Global Relevance
| Region | Impact |
|---|---|
| U.S. | Asset managers and retail traders may reduce BTC exposure amid risk-off divergence signals and dollar strength. |
| UAE | Crypto allocators need to assess liquidity risk and impact on token flows tied to USD-linked capital flight. |
| India | Elevated USDT dominance poses implications for rupee-leveraged crypto funding and stablecoin reserves. |
Technical Outlook Snapshot
| Indicator | Signal | Implication |
|---|---|---|
| Weekly RSI Divergence | Bearish | Momentum fading, risk of pullback |
| DXY inverse head-and-shoulders | Confirmed rebound | Supports USD strength vs BTC |
| USDT Dominance Uptick | Risk sentiment rising | Liquidity rotating into stablecoins |
