Bitcoin may be establishing a short-term bottom after several weeks of significant selling pressure. One market analyst suggests that current conditions are ripe for a relief rally, potentially pushing Bitcoin towards the $100,000 to $110,000 range.
In a recent video analysis, trader Mister Crypto indicated that Bitcoin's (BTC) short-term structure is showing signs of stabilization following what he described as market-wide "capitulation." He posited that indicators reflecting trader behavior suggest that large market participants have started opening new long positions. This is occurring even as market sentiment has plunged into extreme fear territory, a combination that has historically preceded bounces during downturns.
A key technical signal highlighted is the Bitcoin Relative Strength Index (RSI) on the weekly chart, which is approaching the 30 level. "We have bottomed out for Bitcoin right here. We have been reaching the 30 level. Boom," the analyst stated.
The analyst observed that in previous market cycles, this specific zone has closely coincided with market bottoms. While acknowledging that this does not definitively signal the start of a new bull run, he noted that the current setup often indicates at least a temporary reversal.
$102,000 Level in Focus
Another factor supporting the rebound scenario is Bitcoin's current distance from its 50-week moving average, which is presently situated near $102,000. The analysis points out that Bitcoin has repeatedly retraced towards this level after falling below it in prior market cycles. The current expectation is for a bounce that could propel prices back into six figures before any deeper trend emerges.
Broader macroeconomic conditions are also contributing to near-term optimism. The analyst referenced expectations that quantitative tightening might soon conclude, coupled with speculation about a potential interest rate cut at an upcoming policy meeting. Both of these developments tend to favor risk assets like Bitcoin by easing financial conditions.
However, the longer-term outlook remains a point of caution. The analyst asserted that the broader market is currently in bear territory. He warned that any bounce could potentially be followed by renewed weakness later on, as overall market conditions have yet to demonstrate a decisive shift back towards sustained growth.
Crypto Sentiment Lifts from ‘Extreme Fear’
After an 18-day period of "Extreme Fear," the Crypto Fear & Greed Index has now risen to a "Fear" level of 28.
In parallel, André Dragosch, head of research at Bitwise Europe, has stated that Bitcoin could experience significant upside potential. He believes that its current price does not yet reflect improving macroeconomic expectations. Dragosch compared Bitcoin's current risk-reward profile to that of the March 2020 COVID-19 crash, when prices plummeted before a strong rebound. He argued that the market is already pricing in an exceptionally bleak global outlook.