Bitcoin is flashing an important technical “trend change” setup on the monthly chart, with analysts pointing to a newly completed TD9 downtrend pattern as the clearest bearish-to-neutral inflection cue in years. The timing matters because many traders are watching for signs that the 2026 macro downcycle may be moving toward its final phase rather than extending indefinitely.
Separately, momentum measures are increasingly focused on relative strength index (RSI) divergences across multiple time frames—an approach commonly used to gauge whether downside pressure is losing control. While neither development guarantees a bottom, the combination is giving market participants a more structured reason to watch for bullish rotation if key closes hold.
Key takeaways
- Analyst Tony Severino says Bitcoin has “perfected” a TD9 buy setup on the monthly chart, with the last similar downtrend TD9 signal dated to July 2022.
- TD9 patterns are derived from the Tom DeMark Sequential framework and are used to flag potential trend changes when specific candle-count conditions are met.
- A completed TD9 setup is not, by itself, a guaranteed bottom—analysts stress it must be confirmed by where the month closes.
- Traders are also citing bullish RSI divergences across multiple time frames as evidence that trend change may be approaching.
TD9 “perfected” on the monthly chart: what it means
In a Tuesday post on X, analyst Tony Severino flagged a “perfected” buy signal on the TD9 indicator for Bitcoin on the monthly timeframe. He cited TradingView chart data and described the setup as the first of its kind on monthly charts in several years.
TD9 is a derivative of the Tom DeMark Sequential market timing indicator. In simplified terms, it looks for a sequence of nine candles meeting a specific relationship to a reference point from four candles earlier: in an uptrend, nine candles close higher than the close from four candles prior; in a downtrend, they close lower than that same reference. When the conditions are fully satisfied—rather than merely forming partway through—the setup is referred to as “perfected.”
Severino’s observation is that this monthly TD9 downtrend setup has now “perfected,” which would typically be interpreted as an early warning that bearish momentum may be reaching a transition point. Importantly, the analyst also frames the signal as a shift in timing rather than an immediate buy directive.
As he notes, the most recent monthly TD9 downtrend signal occurred in July 2022. In that earlier stretch, BTC/USD required additional months to work through the bear-market bottom—suggesting that even a completed TD9 does not necessarily mean selling pressure ends immediately.
Why “perfected” matters more than the label
One of the key practical details in the discussion is the difference between a setup forming versus a setup being confirmed. A TD9 completion is typically judged by how candles close on the timeframe in question. In the current case, participants are watching the monthly close because a non-confirming close can invalidate the “perfected” status.
That perspective aligns with comments from Proof of Pain podcast host Tony Carrera, who cautioned that a TD9 completion is “not a buy signal by itself,” but still something traders should pay attention to if the setup holds into the close. Carrera’s point effectively reframes TD9 from a single-action trigger into a higher-timeframe checklist item: evidence of exhaustion and transition risk rather than a standalone entry plan.
For investors and traders, this distinction is crucial. Monthly indicators tend to move slowly, and misreading them as imminent reversal calls can lead to premature positioning. But when monthly conditions change, even if the final bottom is months away, it can improve the probability math behind risk-managed strategies—especially those focused on capital preservation during bear phases.
RSI divergences build: traders look for trend-change confirmation
Beyond TD9, attention has also intensified around RSI divergences, a widely used technical concept where price makes a lower low while RSI forms a higher low (or shows other forms of divergence). This is often interpreted as bearish momentum weakening even if price has not yet rebounded meaningfully.
Earlier coverage from Cointelegraph highlighted that market participants still expect additional macro lows before the bear market truly reverses, with different forecasts circulating for where those lows could occur. The same broader reporting also pointed to RSI-related “signals” and how much of the current bear-market cycle may have already played out, including the idea that the downturn could be nearing its later stages.
In the current wave of commentary, Scott Melker—trader, analyst, and podcast host—told followers on X that he hasn’t seen the same level of confirmed and potential bullish divergence with oversold RSI across multiple time frames “ever,” describing the setup as offering “good odds.”
While “good odds” is not the same as certainty, the emphasis on multiple time frames matters. When divergences appear simultaneously on daily, four-hour, weekly, or other layered charts, it typically suggests that sellers are not just pausing—they may be losing incremental momentum across horizons. That can be the kind of condition traders look for right before a range breakout or a more sustained recovery attempt.
What to watch next: confirmation beats prediction
For now, the central question is whether Bitcoin can hold the monthly TD9 completion into the close and whether RSI divergence keeps strengthening rather than reversing. If both trends persist, the technical picture would support the idea that the macro downtrend is shifting toward a transition—but traders should still expect volatility and avoid treating “perfected” patterns as instant proof of a bottom.
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