- Market analysts say rapid price gains paired with large-scale short liquidations are typical features of a market bottom, though Bitcoin still faces several macroeconomic uncertainties.
- Bitcoin has displayed strong momentum in recent days, according to Mati Greenspan, a former senior market analyst at eToro and founder of Quantum Economics.
- Greenspan said the latest move resembles patterns seen during previous market bottoms. Such recoveries often begin with a short squeeze, followed by a powerful green candle and breaks above key technical levels. Once that happens, investors waiting for much lower prices may rush to buy rather than risk missing the rebound.
- He acknowledged that Bitcoin could still experience another decline but said he would not place much weight on that scenario. In his view, sharp rallies often cause FOMO to spread rapidly among investors who remained on the sidelines.
- Jason Fernandes, co-founder of AdLunam and a market analyst, offered a more measured assessment. He said declaring the bear market finished would be premature unless spot Bitcoin ETF inflows remain strong and monetary conditions clearly begin to loosen.
- Fernandes warned that BTC could encounter selling pressure as it approaches major resistance levels. Bitcoin briefly climbed to around $79,200 on Friday before falling back toward $77,500.
- Greenspan remained confident in the recovery, arguing that the current market structure closely resembles previous turning points and that the probability of a major pullback appears relatively low for now.
- He cited several developments supporting the broader crypto market, including White House discussions about Bitcoin Treasury initiatives, congressional efforts to advance digital-asset market-structure legislation, and regulatory moves by the SEC and CFTC aimed at creating greater clarity.
- Fernandes agreed that the macro environment has played an important role. He pointed to the Treasury’s decision to double its bond-buyback operations to $4 billion, which helped lower long-term yields and improve sentiment toward risk assets.
- Bitcoin’s extended period of sideways trading below $64,000-$66,000 had also allowed traders to accumulate substantial short exposure, Fernandes said.
- Once BTC broke higher, those bearish positions began getting liquidated, creating a chain reaction that accelerated the rally. Moves above $66,000 and the 200-day moving average also activated algorithmic trend-following strategies, adding further buying pressure.
- Adam Morgan McCarthy, lead researcher at London-based digital-asset liquidity and market-data firm LO:TECH, said the mechanics of the rally point strongly toward a short squeeze.
- He noted that more than half of Bitcoin’s 7.1% Wednesday gain came within just one hour, even though that period represented roughly one-third of the day’s trading volume. Such concentrated activity is often associated with forced short covering.
- McCarthy also highlighted the contrast between Bitcoin and gold. Gold rallied steadily after Treasury announced the larger bond-buyback program, without the forced buying that helped propel Bitcoin higher.
- He argued that gold therefore provides a clearer indication of investors seeking protection from inflation and currency-related risks, while Bitcoin’s move appears more heavily influenced by derivatives positioning.
- Tobias Bauer, co-founder of TBV, pointed to another sign that the market may be becoming crowded. Binance recorded around $1.26 billion in Bitcoin futures trading during a single 60-second period, approximately 361 times the normal volume for one minute.
- With funding rates approaching their exchange limits, Bauer said traders are increasingly positioned in the same direction, making leveraged long positions more expensive and potentially more vulnerable if momentum reverses.
BTC Surges Through Major Levels, Leaving Analysts Split on What Comes Next
