After weeks of heavy selling, Bitcoin (BTC) is showing signs of stabilization, leading analysts to suggest a potential "relief bounce" in the near term. This comes as the cryptocurrency market has experienced significant pressure, with Bitcoin falling approximately 26.4% from its October peak above $126,000. However, several technical and macroeconomic factors are converging, hinting at a possible upward correction.
One market analyst, Mister Crypto, pointed out that Bitcoin's short-term structure indicates stabilization following a period of market-wide "capitulation". Indicators tied to trader behavior suggest that large players have begun opening new long positions, even as sentiment remains in "extreme fear" territory. Historically, this combination has often preceded bounces during market downturns. The Crypto Fear & Greed Index, after lingering in "Extreme Fear" for 18 days, has risen to a "Fear" level of 28, reflecting a slight improvement in market sentiment.
A key technical signal being closely watched is the Bitcoin Relative Strength Index (RSI) on the weekly chart, which is approaching the 30 level. According to Mister Crypto, this zone has coincided with market bottoms in previous cycles. While this doesn't guarantee a new bull run, it often signals a temporary reversal.
Another factor supporting a potential rebound is Bitcoin's distance from its 50-week moving average, which is currently near $102,000. Historically, Bitcoin has retraced toward this level after dipping below it in previous market cycles. The expectation is that a bounce could lift prices back into six-figure territory before any deeper trend emerges. Some analysts are suggesting this rally could reach the $100,000 to $110,000 range.
Macroeconomic conditions are also fueling near-term optimism. There are growing expectations that quantitative tightening could soon end, and speculation is building around another interest rate cut at an upcoming policy meeting. These developments tend to favor risk assets like Bitcoin by easing financial conditions.
However, a note of caution remains. The broader market is still considered to be in bear territory, and any bounce could be followed by renewed weakness. Sustained growth will require a more decisive shift in broader market conditions. Institutional flows into U.S.-listed Bitcoin ETFs remain weak, and many potential buyers may be waiting for deeper discounts before re-entering the market. Rising bond yields and uncertainty over interest-rate policy are also compounding the cautious tone.
Despite the cautious outlook, some analysts believe Bitcoin's current price doesn't reflect improving macro expectations. Bitwise Europe research head André Dragosch argued that Bitcoin now offers an "asymmetric" risk-reward similar to the COVID crash of March 2020, when prices plunged before rebounding strongly. He suggests that the market is already pricing in an extremely bleak global outlook.
For now, Bitcoin's trajectory appears closely tied to the overall sentiment in global risk markets. The coming weeks will be crucial in determining whether this potential relief bounce can turn into a more sustainable recovery or simply a temporary reprieve.
