Five Divergence Signals Indicating a Crypto Market Recovery in April 2025

In April 2025, the crypto market indicated positive trends for Bitcoin and altcoins through several divergence signals. Key observations include Bitcoin’s decoupling from the US Dollar Index and NASDAQ, a resurgence of long-term holder accumulation, and signs of an impending recovery in altcoins, as fewer new lows were established and the altcoin market cap rebounded significantly.

In April 2025, the crypto market showed promising signs of recovery for Bitcoin and altcoins, evidenced by several divergence signals. These signals, defined by a reversal in trends between correlated metrics, could indicate shifts in momentum. Analysis highlights five significant divergences—three for Bitcoin and two for altcoins—to inform investor strategies.

Bitcoin displayed notable divergence from the US Dollar Index (DXY). Typically, Bitcoin and DXY move inversely; however, from September 2024 to March 2025, both aligned. April’s announcement of a new US tariff policy reversed this correlation, as Bitcoin surged from around $75,000 to $91,000 while the DXY fell sharply. This shift indicates Bitcoin’s rising status as a safe-haven asset amid economic concerns over tariffs.

Furthermore, Tuur Demeester highlighted Bitcoin’s independence from the NASDAQ Index, with Bitcoin showing growth divergent from the tech market’s slowdown. This decoupling signifies Bitcoin’s emerging identity as a standalone asset, reflecting strength against traditional market pressures. Demeester predicts that terms like “Bitcoin divergence” will dominate throughout 2025.

Lastly, data from CryptoQuant shows that long-term holders (LTH) resumed accumulation of Bitcoin, while short-term holders (STH) began selling—indicating a potential re-accumulation phase. The behaviour of LTH suggests a conviction in macro trends, contrasting with the often reactive strategies of STH, thus highlighting a pivotal moment for Bitcoin.

Altcoins also show signs of recovery based on divergent indicators. Analyst Jamie Coutts emphasised a decrease in the number of altcoins reaching new lows over the past year, even though overall market capitalisation fell. This pattern commonly precedes an altcoin recovery, reflecting reduced panic-selling and increasing market optimism.

Additionally, Merlijn The Trader identified a bearish divergence in Bitcoin Dominance, suggesting potential market shifts toward altcoins. The total altcoin market cap rebounded by 20% in April, indicating strong buying interest and the possibility of an advantageous environment for altcoins in the near future.