A TD9 buy signal has appeared on Bitcoin’s monthly chart for the first time since July 2022, renewing attention on the possibility of a reversal in the long-term downtrend.

Cointelegraph reported on Tuesday that market analyst Tony Severino said on X, formerly Twitter, that Bitcoin has formed a perfect TD9 buy setup on a monthly basis.

TD9 is a market-timing indicator in the Tom DeMark Sequential family. It signals the possibility of a trend change when a market closes higher or lower than a prior reference close for a set number of periods in a row. The latest signal is the first in years on a monthly basis, and the previous downtrend signal was confirmed in July 2022.

Even then, a rebound did not begin immediately after the signal appeared. Bitcoin’s price continued to build a base for about 5 months afterward. Severino also noted that a completed TD9 signal does not necessarily mean a bottom has been formed.

Market participants are also not treating the signal alone as a reason to buy. Tony Carreira, host of the “Proof of Pain” podcast, said, “This signal itself does not mean a bottom,” adding, “If it holds through the monthly close, it is a signal worth watching.”

Views are mixed in the market over whether the bear market has ended. Some participants think there is another macro low ahead. In particular, the $55,000 level is frequently cited as the next downside target, and some view comparisons of Bitcoin’s price cycle as indicating the current bear market is not fully over.

Technical indicators, however, are also showing signs that point to the possibility of a rebound. The relative strength index (RSI) is forming bullish divergence across multiple time frames. This is one of the typical reversal signals that often appears when momentum slows even if prices remain weak.

Trader and analyst Scott Melker said, “I don’t know if I’ve ever seen bullish divergence confirmed or potentially confirmed alongside oversold RSI across this many time frames.”

Bitcoin’s market now appears to have entered a phase of absorbing opposing signals at the same time. Monthly TD9 and RSI divergence add weight to the possibility of a medium- to long-term reversal, but the broader market still remains on guard for another low. The next focus will be whether Bitcoin holds the signal through the monthly close and whether actual price moves unfold similarly to the 2022 bottoming period.

Bitcoin has "perfected" a TD9 buy setup on the monthly This doesn't necessarily mean the bottom is in, but the signal is the signal is the signal As a caveat, this also confirmed a TSDT Resistance downtrend pic.twitter.com/XSVX8YKr7j