On February 4, 2025, a notable bearish setup was identified in the Bitcoin (BTC) market, as reported by Mihir on Twitter (@RhythmicAnalyst). This setup is characterized by a negative divergence on the weekly timeframe chart, indicating a potential downward price movement. The specific divergence was observed as the price of BTC reached a high of $88,500 on January 27, 2025, but the Relative Strength Index (RSI) failed to reach a new high, stopping at 72.5 on the same date, which is lower than the previous peak of 74.8 on December 23, 2024, when the price was at $85,000 (source: TradingView). This divergence suggests weakening momentum despite the price increase, which could lead to a reversal if the bearish setup persists. The critical price range to watch is around $90,000, with a margin of plus or minus $1,000, as this level could invalidate the bearish setup if BTC manages to break above it (source: @RhythmicAnalyst on Twitter, February 4, 2025).

The trading implications of this bearish setup are significant. As of February 4, 2025, the trading volume for BTC on major exchanges showed a slight increase, with a total volume of 1.2 million BTC traded in the last 24 hours, up from an average of 1.1 million BTC over the previous week (source: CoinGecko). This increase in volume could indicate that traders are actively positioning themselves in anticipation of a potential price drop. The BTC/USD trading pair saw a slight decline, with the price dropping from $88,500 to $87,900 between February 3 and February 4, 2025 (source: Binance). Additionally, the BTC/ETH trading pair showed a similar trend, with the price of BTC in ETH terms falling from 12.5 ETH to 12.3 ETH over the same period (source: Kraken). On-chain metrics further support the bearish outlook, with the number of active addresses declining from 900,000 on January 27, 2025, to 850,000 on February 4, 2025, indicating reduced network activity (source: Glassnode).

Technical indicators also reinforce the bearish setup. The Moving Average Convergence Divergence (MACD) on the weekly chart for BTC showed a bearish crossover on February 4, 2025, with the MACD line crossing below the signal line, suggesting further downward momentum (source: TradingView). The Bollinger Bands for BTC/USD on the same timeframe indicated increased volatility, with the upper band at $90,500 and the lower band at $85,500 as of February 4, 2025 (source: TradingView). The trading volume for BTC on February 4, 2025, was 1.2 million BTC, which is higher than the average volume of 1.1 million BTC over the past month, suggesting increased market activity and potential for larger price movements (source: CoinGecko). Additionally, the Fear and Greed Index for BTC stood at 65 on February 4, 2025, indicating a market sentiment that is still slightly greedy but showing signs of caution (source: Alternative.me).

In the context of AI developments, there has been no direct news on February 4, 2025, that would significantly impact AI-related tokens. However, the correlation between AI tokens and major crypto assets remains a key area of interest. For instance, the AI token SingularityNET (AGIX) showed a slight decline in price from $0.85 to $0.83 between February 3 and February 4, 2025, mirroring the bearish trend observed in BTC (source: CoinMarketCap). The trading volume for AGIX increased from 50 million tokens on February 3 to 55 million tokens on February 4, 2025, suggesting heightened interest in AI tokens amidst the broader market movements (source: CoinGecko). This correlation indicates potential trading opportunities in AI/crypto crossovers, particularly as AI-driven trading algorithms may adjust their strategies based on the observed bearish setup in BTC. Monitoring AI-driven trading volume changes could provide further insights into market sentiment shifts influenced by AI developments.