Bitcoin’s Recent Struggles
Bitcoin’s rebound from last week’s dip seems to have hit a significant obstacle.
Just last week, the cryptocurrency dipped to the low-$60,000 range, an event that felt a bit like capitulation. However, over the weekend, it bounced back towards $70,000. But now, that upward momentum appears to be fading.
This slowdown has prompted traders to reconsider the rally, viewing it as a typical bear market scenario—a sharp increase that draws in momentary buying excitement, but then gets overwhelmed by sellers eager to take profits.
“There’s still plenty of supply in the market from those looking to exit after the recent backlash,” remarked Alex Kupczykevich, a market analyst at FxPro. “We should be prepared for another test of the 200-week moving average soon.”
He also expressed skepticism about the immediate outlook, pointing out that the recent economic recovery has stalled and has witnessed a decline of roughly $2.4 trillion.
Sentiment in the market reflects a similar fragility. The Crypto Fear and Greed Index dropped to 6 over the weekend, echoing the downturn experienced during the FTX crisis in 2022, though it did recover slightly to 14 by late Monday.
Kupczykevich noted that these levels are still “too low for confident buying” and suggested that this change signals more than just temporary unease.
The liquidity situation is another layer of concern. When the order book is thin, even moderate selling pressure can lead to significant price swings. This can trigger stop losses and liquidations, which only adds to market chaos.
Rather than just a single news headline, this context might explain why Bitcoin can experience several thousand-dollar fluctuations in a day without breaking through major resistance levels.
Monday’s notes noted a broader trend of risk aversion. Trading volume across major centralized exchanges has decreased by about 30% since October and November, with monthly spot trading dropping from around $1 trillion to roughly $700 billion.
Interestingly, despite a few spikes in trading activity last week, the overall pattern indicates a decline in market participants. It seems that traders, especially retail investors, are withdrawing from the market gradually instead of a mass exodus.
This lack of liquidity can lead to quick price movements even with slight selling pressure, unlike the panic-driven high volumes usually associated with real capitulation and a more stable bottom.
Kaidaka framed the situation in the context of the well-known four-year halving cycle. Bitcoin had soared to about $126,000 between late 2025 and early 2026 but has since dropped sharply, and the recent slide to the $60,000 to $70,000 range represents a decline of over 50% from its peak.
These bottoms often take months to solidify and are marked by several failed recovery attempts.
For now, it’s crucial to see if Bitcoin can hold the $60,000 level. If buyers remain engaged, the market might stabilize in a volatile way. Otherwise, the same illiquid conditions that contributed to the current downturn could swiftly return, particularly if the broader economic landscape continues to lean towards risk aversion.
