Bitcoin could hit a near-term bottom after weeks of heavy selling, with one market analyst arguing that the stage is about for a recovery rally towards the $100,000-$110,000 range.
In a recent video, trader Mister Crypto said Bitcoin (BTC)'s short-term structure is showing signs of stabilization after calling your entire market a “capitulation.” He claimed that indicators tied to trader behavior suggest that major players have begun opening latest long positions at the same time as sentiment slipped into extreme fear territory, a combination that has historically led to upswings during downturns.
One of an important technical signals is the Bitcoin Relative Strength Index (RSI) on the weekly chart, which is approaching the 30 mark. “We've bottomed out here for Bitcoin. We've hit the 30 mark. Boom,” he said.
The analyst noted that this zone has closely coincided with market lows in past cycles. While he cautioned that this is just not a guarantee of the beginning of a brand new uptrend, he said that the present situation often signals no less than a brief reversal.
Bitcoin price movement after Thanksgiving. Source: Mister Crypto
$102,000 mark in focus
Another factor adding weight to the recovery scenario is Bitcoin's distance from the 50-week moving average, which is currently around $102,000. According to the evaluation, Bitcoin has repeatedly fallen back to this level after falling below it in previous market cycles. An upswing is now expected that might drive prices back into the six-figure range before a deeper trend emerges.
Macroeconomic conditions are also fueling short-term optimism. The analyst pointed to expectations that quantitative tightening could end soon, coupled with speculation about an extra rate cut at an upcoming monetary policy meeting. Both developments are inclined to favor risk assets like Bitcoin by easing financial conditions.
However, the longer-term outlook stays cautious. The analyst claimed that the broader market is in bear territory. He warned that any upswing could possibly be followed by renewed weakness later, as general conditions may not yet show a decisive turn back to sustainable growth.
Crypto sentiment fades after “extreme fear.”
After spending 18 days in “extreme fear,” the Crypto Fear & Greed Index finally rose to a “fear” level of 28.
Meanwhile, André Dragosch, head of research at Bitwise Europe, said Bitcoin could have major upside potential as its current price doesn’t reflect improving macroeconomic expectations. He said Bitcoin now offers an “asymmetric” risk-reward trade-off, just like the COVID crash in March 2020 when prices collapsed before recovering strongly, arguing that the market is already pricing in a particularly bleak global outlook.
