According to a Bloomberg report on Tuesday (11th), Bitcoin has shown little signs of recovery after its sharp decline last month. After briefly surging to $107,000 on Monday, it fell back to $105,000, with the entire cryptocurrency market continuing to weaken. Analysts believe that Bitcoin must stabilize above $110,000 to confirm a resumption of its upward trend.
![图片[1]-Is the Bitcoin rally real or just a dead cat bounce? Analysts say it needs to hold above $110,000 to be considered a valid move.-OzABC](https://www.ozabc.com/wp-content/uploads/images.webp)
Previously, Bitcoin experienced a massive sell-off, wiping out billions of dollars in market value. This was mainly due to large investors taking profits near the year’s highs, coupled with lingering market apprehension following the forced liquidation wave in early October.
The futures market is quiet.
Market momentum has been slow to recover. Open interest in Bitcoin perpetual futures is around $68 billion, a significant drop from the peak of $94 billion last month, while funding rates for leveraged positions have remained flat.
ETF inflows were similarly dismal. Despite gains in both the stock and bond markets following reports of a potential government reopening, the U.S.-listed Bitcoin ETF saw only $1 million in inflows on Monday.
From a technical perspective, Bitcoin is still below its 200-day moving average, which is currently around $110,000 and analysts consider a key threshold for any decent rally.
While Bitcoin has risen this year, its gains have lagged behind those of gold and tech stocks. Following positive news from Washington that it could end the longest government shutdown in history, crypto assets rebounded slightly, following other riskier assets, but market sentiment remains cautious.
What do traders think?
George Mandres, a senior trader at XBTO Trading, said Bitcoin ‘s rebound felt like a “dead cat bounce.” The stock market is bullish, with expectations that government reopening will boost prices. However, the cryptocurrency atmosphere is different, with news of large-scale selling by early Bitcoin holders drawing attention. This selling pressure, coupled with pressure on digital asset treasury premiums and ETF inflows indicating a lack of new funds entering the market, is all undermining market confidence.
IG Australia analyst Tony Sycamore said the most noticeable change in the past 24 hours has been Bitcoin’s rise in tandem with risk assets, a correlation that broke down last month. Whether this recent decoupling has ended depends on whether the correlation can last for another trading day. Overall, however, it’s a positive sign.
From a technical perspective, the correction from $126,300 to $98,900 may have ended, and the upward trend has resumed. A sustained move above the 200-day moving average of $110,000 would significantly strengthen the credibility of this assessment.
FxPro’s chief market analyst, Alex Kuptsikevich, stated that the total market capitalization of cryptocurrencies fell 1.1%, cooling down after a strong first half of Monday’s gains. The 50-day moving average at $3.62 trillion became technical resistance, with the upward momentum stalled at $3.6 trillion. Although Monday saw significant gains, the market may be forming new, lower highs, continuing the downtrend that began over a month ago. The market is clearly not ready for a return to exuberance, with profit-taking occurring after growth momentum was realized. Reduced corporate buying is taking effect.
BTC Markets analyst Rachael Lucas believes the recent rally appears to be a classic short-covering move, fueled by institutional fear of missing out. After testing a low of $98,900, Bitcoin rebounded from the key support level of $103,000 (the 50-week moving average) and is now eyeing resistance at $110,400. A break above this level could see a move towards $115,600 to $118,000.
On the downside, $103,000 remains a key structural level. A break below this level could open the way to $86,000, with deeper support at $82,000, coinciding with the 100-week moving average. A break below these areas could reignite selling pressure.
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