After weeks of suffering, Bitcoin (BTC) has gotten back on its feet, recording a jump of 4% that brought it back above 81,000 dollars. The rebound comes simultaneously with a recovery in U.S. stock futures, after one of the bloodiest sessions in recent months. But is it really the turning point or just an illusion before a new blow?
Bitcoin and traditional markets: signs of recovery after the crash
The previous day had been a nightmare for risk assets: the Nasdaq Composite lost 4%, while the S&P 500 fell by 2.7%, forcing investors into a mass exodus. Bitcoin, a faithful companion of the stock markets in the worst moments, followed suit, hitting four-month lows at 76,600 dollars on Bitstamp.
But today the air seems different. The price of BTC has made a noteworthy recovery, while traditional indices have shown the first signs of recovery. According to TradingView, the market is experiencing a relief phase, with Nasdaq 100 futures recovering 0.4%.
Bitcoin (BTC): is the big Short Squeeze just around the corner?
The experts are divided. Some analysts believe that the market is now in an unsustainable bear trend, increasing the probability of a short squeeze—that is, an explosive rebound caused by the forced closing of short positions.
The Kobeissi Letter highlighted how the sentiment is in an extreme fear zone, which could push the market to a technical rebound.
“Even the most convinced bears need a bit of relief. Markets do not crash in a straight line, and sooner or later, a short squeeze will be inevitable”.
Another authoritative voice, the economist Timothy Peterson, has instead pointed out how the VIX volatility index—a key indicator of fear in the markets—has been higher only 11% of the time since 1990.
Translated into numbers: there is an 89% probability that the market has already hit the bottom.
Bitcoin technical analysis: rebound or trap?
On a technical level, Bitcoin is showing signs of life. Analyst Cas Abbe highlighted that BTC has just formed a bull divergence on the RSI indicator in the 4-hour timeframe, suggesting a possible upward movement in the short term:
“I am not saying that it is the beginning of a new bull market, but a rebound now seems inevitable”.
Others, however, remain skeptical. Rekt Capital advises caution, while trader HTL-NL has no illusions:
“Do not think that it is only a problem of crypto. This crisis is affecting all risky assets. The recession is at the door and the United States is about to face very difficult times”.
Conclusion: Is Bitcoin ready to rise again or is it just gearing up for another plunge?
Bitcoin has shown signs of strength, but the game is far from won. If the VIX index suggests that we might have hit the bottom, macroeconomic indicators tell a darker story. The recession, market slowdown, and global uncertainty could still play against criptovalute.
What do you think? Has Bitcoin already hit the bottom or is the worst yet to come?
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