jakiro
Author: Ye Huiwen, Wall Street News
Bitcoin is struggling to rebound after suffering hundreds of billions of dollars in market value last month, but fragile market sentiment and continued selling pressure are making any recovery attempts difficult.
While good news about an end to the government shutdown in Washington has boosted traditional risk assets, the cryptocurrency market has not experienced the strong gains expected, highlighting the continued unease among investors after huge losses.
The world’s largest cryptocurrency briefly topped $107,000 on Monday, but quickly fell back below $105,000.This lackluster price performance, in stark contrast to the gains in stock and credit markets due to the reopening of the U.S. government, indicates that the internal momentum of crypto assets is still insufficient.
According to Bloomberg, Bitcoin has lost about $340 billion in market value since October 10, when Trump’s surprise announcement of tariffs triggered a record liquidation.The market generally believes that the recent downturn is partly caused by early large holders (known as “OG whales”) taking profits near the yearly high, while the shadow of the large-scale liquidation event in early October is also lingering.
Signs of weakness were evident across several key indicators.Data measuring market sentiment and leverage levels show investor enthusiasm is far from restored.Meanwhile, key resistance levels on technical charts have also weighed heavily on prices, with market participants divided on the outlook.
Key indicators show lack of momentum
A slew of data suggests the momentum driving Bitcoin’s rise has yet to return.Total open interest in Bitcoin perpetual futures is currently around $68 billion, well below last month’s peak of $94 billion, reflecting a significant cooling of speculative interest in the derivatives market.At the same time, funding rates, which measure the cost of leveraged positions, have remained flat, meaning traders are not actively adding leverage to go long.
What deserves more attention is that the spot Bitcoin ETF, which is an important source of new funds in the market, also performed mediocrely.According to data compiled by Bloomberg, although the U.S. stock market rose across the board on Monday, the U.S.-listed Bitcoin ETF only recorded a net inflow of $1 million that day.George Mandres, senior trader at XBTO Trading, pointed out that the lack of new funds represented by ETF inflows is continuing to affect the market’s risk sentiment.
Technical obstacles abound
From a technical perspective, Bitcoin’s prospects also face challenges.Currently, its price is still trading below the 200-day moving average (currently near $110,000), a level that analysts generally view as a key threshold for any sustained upward move.
IG Australia analyst Tony Sycamore said prices would need to sustain a break above the 200-day moving average to “significantly increase confidence in the view [that the uptrend has resumed]”.Alex Kuptsikevich, chief market analyst at FxPro, also observed that the broader cryptocurrency market capitalization encountered technical resistance at the 50-day moving average near $3.62 trillion.He believes the market may be forming a new, lower local high, continuing a downward trend that began more than a month ago.
BTC Markets analyst Rachael Lucas added that $103,000 is a key structural support level.A break below this level could open a channel for prices to drop towards $86,000 or even deeper towards $82,000 (in line with the 100-week moving average), with any move below these areas likely to reignite selling pressure.
Market Opinions Divided: Dead Cat Bounce or Trend Reversal?
Market participants were sharply divided in their interpretations of Monday’s brief rally.Some believe this is just a temporary respite from the bear market, while others are looking for early signs of a trend reversal.
George Mandres bluntly said that this rebound “feels like a dead cat rebound.”He believes that sentiment in the cryptocurrency space is different from that in the stock market, with claims surrounding early Bitcoin buyers selling large amounts of tokens gaining a lot of traction, and that this supply pressure is eroding risk appetite.Alex Kuptsikevich also said that the market is clearly not ready to switch to “crazy optimistic mode” and profit-taking continues after the growth impulse is realized.
However, some analysts hold a relatively positive view.Tony Sycamore pointed out that the most striking feature of the past 24 hours was that Bitcoin briefly tracked the rise in risk assets after experiencing a correlation breakdown last month.He sees this as a “positive sign” and technically suggests that the correction that began at the $126,272 high may have completed at the recent low of $98,898.
Rachael Lucas described the recent rise as a “classic short-covering rally mixed with some institutional FOMO (Fear of Missing Out) sentiment.”This view suggests that the current rally is driven more by market structural factors than a solid return to fundamental confidence.
