Bitcoin experienced a tumultuous start to the week, facing significant downward pressure that saw its price dip alongside altcoins before stabilizing around the $112,000 mark. Ethereum also found some footing, settling near $4,200 after a sharp sell-off. Although the modest rebounds have brought a temporary sense of relief to traders, analysts are urging caution.
According to CryptoQuant analyst Axel Adler, the recent price movements are not indicative of a sustained upward trend. He noted that the market dynamics have shifted decisively in favor of bears, with key indicators pointing toward continued selling pressure. Notably, the Composite Index—a technical tool used to track momentum shifts—has dipped below the -0.4 level. Historically, this level suggests that sellers remain in control of the market, indicated by the analyst’s assessment that the stabilization is more of a corrective phase rather than a bullish reversal.
Adler characterized the current price action as a “cathartic rally,” which typically comes after heavy selling. This type of rally is marked by brief recoveries that do not fundamentally impact the overall downward trend. He stated, “The market has moved into corrective mode,” asserting that the current pattern aligns more closely with consolidation under bear dominance than the onset of a rally.
Despite this cautious outlook, Adler pointed out a critical support level for traders to monitor: $109,500. He believes that this price point will play a crucial role in determining Bitcoin’s ability to regroup. If Bitcoin manages to hold above this threshold and the Composite Index rises back above zero, it could pave the way for a challenge against the $117,700 resistance zone. Such a move would signify that buyers are gradually regaining momentum in the market.
However, Adler stressed the importance of not jumping to conclusions that the worst is behind us just yet. With the broader trend still skewed downward, he advised that any short-term recoveries should be approached with caution. The next few days will be crucial in determining whether Bitcoin can break free from its corrective phase or if it will continue to slide toward lower support levels.
