Bitcoin Price Analysis: BTC Rebound Stalls As Relief Rally Loses Wind, Market Sentiment Remains In Extreme Fear
Bitcoin’s (BTC) sharp recovery stalled between $70,000 and $71,000 as selling pressure prevented a sustained recovery. Analysts stated that the move was a classic bear-market relief rally rather than the beginning of a sustained rally.
The flagship cryptocurrency dropped to a low of $68,446 on Monday before rebounding to reclaim $70,000 and moving to $71,003. However, it lost momentum after reaching this level and dropped below $70,000 again. The flagship cryptocurrency is marginally down during the ongoing session, trading around $68,970.
Some analysts have warned that weak investor sentiment, thin liquidity, and overhead supply could prevent a sustained uptrend and potentially trigger a retest of the $60,000 level.
Hype Around Crypto Is Fading: Chris Waller
Federal Reserve Governor Chris Waller believes the hype around crypto that began with President Trump’s election victory is fading as it becomes increasingly entangled with traditional finance. Waller stated during a conference on Monday,
I think some of the euphoria that came into the crypto world with the current administration is fading. A lot of it has been brought into mainstream finance. Then, you know, things have to happen there, so I think there was a lot of sell-off just because firms that got into it from mainstream finance had to adjust their risk positions.
Waller also stated that the failure to pass the crypto market structure bill had also deterred investors, as uncertainty around crypto regulation persisted. The Federal Reserve Governor also brushed aside Bitcoin and the cryptocurrency market’s steep decline, stating it was “part of the game” with crypto.
You get in, you make some money, you might lose some money — that’s the nature of the beast. Look, prices go up, prices go down — it’s just the nature of the business. If you don’t like it, don’t get in it, that’s my advice to everybody.
Bitcoin ETFs Extend Rebound
Spot Bitcoin ETFs continued their recovery, registering a second day of inflows. The ETFs recorded $371 million in inflows on Friday, and followed it up with another $144.9 million in inflows on Monday. However, the inflows are yet to offset last week’s outflows and the over $1.9 billion in redemptions year-to-date. However, returning inflows could indicate a potential trend reversal. CoinShares’ head of research, James Butterfill, stated in an update on Monday,
Outflows slowed sharply to $187 million despite heavy price pressure, with the deceleration in flows historically signaling a potential inflection point.
Butterfill also stated that early Bitcoin holders were unfazed by rising institutional inflows, even as heavy ETF outflows dragged BTC towards the October 2024 price levels. Bernstein analysts described Bitcoin’s latest downturn as the “weakest bear case” scenario in the cryptocurrency’s history, highlighting the absence of industry failures associated with deep downturns. With the absence of a catalyst, some analysts have linked the volatility and downturn to the growing institutional presence in Bitcoin. The analysts also highlighted investor concerns about ETFs and broader financialization diluting Bitcoin’s scarcity narrative.
Trump Administration Could Buy Bitcoin For Strategic Reserve
Market commentator Jim Cramer has claimed that the Trump administration plans to buy Bitcoin for the US Strategic Reserve. According to Cramer, the administration is targeting a $60,000 entry price.
I heard that at $60,000, the President is gonna fill the Bitcoin Reserve.
According to data from Arkham, the US government holds 328,372 BTC, valued at around $23 billion. However, March 2025’s executive order states that Bitcoin for the reserve will come from criminal and civil forfeitures, and that deposits cannot be sold.
Bitcoin (BTC) Price Analysis
Bitcoin (BTC) slumped below the $70,000 mark again as its recovery stalled between $70,000 and $71,000. Analysts stated that the rebound was part of a classic bear market relief rally and not the beginning of another uptrend. Currently, any uptrend is hitting a wave of supply around the $70,000 mark as investors look to exit their positions. FxPro chief market analyst Alex Kuptsikevich stated,
There is still a huge supply in the markets from those who want to exit the first cryptocurrency on the rebound. In such conditions, it is worth being prepared for a new test of the 200-week moving average soon. We remain very sceptical about the near future, as the recovery momentum lost steam over the weekend, encountering a sell-off near the $2.4T level. Perhaps we have only seen a bounce on the way down, which is not yet complete.
The Crypto Fear & Greed Index slumped to its lowest level since 2022, dropping to 6 before recovering to 14 late on Monday. The index currently sits at 10, still firmly in “extreme fear” territory. According to Kuptsikevich, the index is too low for investors to make confident purchases. Thin liquidity conditions are adding to investor concerns. Low liquidity means even modest selling pressure can have a substantial impact on market conditions, triggering additional liquidations and creating more selling pressure.
Kaiko described current market conditions as a “broader risk-off unwind,” adding that aggregate trading volumes across exchanges have declined 30% since October and November. Monthly spot volumes have also dropped from around $1 trillion to $700 billion.
Bitcoin (BTC) ended the previous weekend in the red, dropping over 2% to $76,895. The flagship cryptocurrency began the previous week in positive territory despite selling pressure, rising over 2% to $78,666. However, selling pressure returned on Tuesday as the price fell nearly 4% to a low of $82,859 before settling at $75,661. Sellers retained control on Wednesday as BTC fell 3.52% to $72,998. Selling pressure intensified on Thursday as BTC plunged nearly 14% to $62,791.
Source: TradingView
BTC plunged to a low of $60,000 on Friday as bearish sentiment persisted. However, it rebounded from this level to reclaim $70,000 and move to $70,259. Price action was mixed over the weekend as BTC fell 1.825 on Saturday before rising 1.49% on Sunday to settle at $70,279. The price reached an intraday high of $71,380 on Monday before eventually settling at $70,101. BTC is down over 2% during the ongoing session, trading around $68,693.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.