Bitcoin’s recent recovery from a steep sell-off has hit a significant barrier as traders reassess the sustainability of the rebound. After plummeting to the low $60,000 range last week—a drop that resembled capitulation—the price of the largest cryptocurrency climbed back toward the $70,000 mark during the weekend. However, this momentum has faltered, prompting analysts to interpret the scenario as a classic bear-market pattern characterized by a brief relief rally that draws in dip buyers, only to be met by a surge in selling from those looking to capitalize on better prices.
Alex Kuptsikevich, chief market analyst at FxPro, shared insights on the challenging market landscape, noting the overwhelming supply present as many investors anticipate exits from Bitcoin during this rebound phase. He highlighted the potential for another test of the 200-week moving average, stating, “There is still a huge supply in the markets from those who want to exit the first cryptocurrency on the rebound.” Kuptsikevich expressed skepticism about the market’s near-term prospects, suggesting that the observed recovery momentum has dwindled, particularly after the sell-off at the $2.4 trillion level. He cautioned that the bounce might merely be a temporary spike within a broader downward trajectory.
Investor sentiment echoed this cautious stance. The Crypto Fear and Greed Index, a gauge of market sentiment, plummeted to a low of 6 over the weekend—a level comparable to the downturn experienced in late 2022 during the FTX crisis—before showing a slight recovery to 14 late on Monday. Kuptsikevich characterized these figures as “too low for confident purchases,” arguing that they reflect persistent anxiety among traders rather than momentary jitters.
Compounding this unease are the prevailing liquidity conditions in the market. Thinner order books mean that even modest selling pressure can trigger significant price fluctuations, leading to rapid stop-outs and liquidations. This feedback loop can create a disordered price action, resulting in Bitcoin’s capability to experience fluctuations of thousands of dollars in a single session without successfully breaking through key resistance levels.
A report from Kaiko on Monday noted that the overall trading environment is indicative of a broader risk-off sentiment among investors. According to the firm, aggregate trading volumes across major centralized exchanges have declined significantly—by approximately 30% since October and November. Monthly spot trading volumes have fallen from around $1 trillion to the $700 billion range. Although there have been sporadic surges in trading activity, the overarching trend points to a gradual exit by traders, especially retail investors, from the market.
This depletion of liquidity raises the risk of rapid price declines under relatively modest selling pressure, with a lack of heavy, panic-driven volume that typically indicates a clear capitulation or durable market bottom. Kaiko also contextualized Bitcoin’s recent price movements within its historical four-year halving cycle, noting that Bitcoin had peaked around $126,000 in late 2025 or early 2026, followed by a notable retracement that landed it within the $60,000-$70,000 bracket—a decline exceeding 50% from the all-time highs. Historically, such market lows can take months to settle, often featuring multiple failed rallies.
Currently, Bitcoin’s ability to maintain its footing above the $60,000 level is viewed as a crucial signal. A sustained defense of this area might lead to a period of choppy consolidation in the market. Conversely, if downward pressure continues, the same thin liquidity dynamics that fueled the recent washout could resurface rapidly, particularly if broader macroeconomic conditions remain risk-averse.
