Market Rebound Driven by Seller Exhaustion
Bitcoin experienced a recovery on Sunday, following an extreme oversold reading on the Relative Strength Index and more than $206 million in weekend liquidations. These factors signaled a potential exhaustion of sellers in the market.
As of 1:36 p.m. UTC, the largest cryptocurrency was trading near $86,466, showing a gain of approximately 2.7% from earlier in the day. This upturn occurred after crypto analyst Ali Martinez highlighted the oversold signal on the RSI, a momentum indicator that measures the pace of price change on a scale from 0 to 100.
Traders generally interpret RSI readings below 30 as an indication that sellers might have pushed the market too far, too quickly. The chart shared by Martinez indicated that Bitcoin's previous two instances of entering this zone, during 2023 and March 2025, preceded short-term rebounds. At the time of his post, Bitcoin was trading near $84,173.
Broader Market Performance
The total cryptocurrency market capitalization saw an increase of 3.29% over a 24-hour period, reaching $2.95 trillion. This growth aligns with Bitcoin's recovery, and most of the top-20 non-stablecoin assets also moved higher.
Ethereum gained 4.5%, trading around $2,835. Other cryptocurrencies such as Solana, BNB, DOGE, ADA, and TRX also posted daily increases. While many tokens remain significantly lower over the past month, Sunday's gains suggest that sellers might be tiring after weeks of sustained downward pressure.
XRP and Zcash showed notable performance among major altcoins. XRP climbed 7.7% to approximately $2.04, while Zcash surged 14.1% to $574.05. The privacy-focused token has seen substantial gains, rallying 113.5% over the past month and more than 922% year-to-date. Privacy tokens, including Zcash and Monero (XMR), have recently outperformed most other sectors.
Impact of Derivatives Liquidations
The market rebound followed significant derivatives liquidations. CoinGlass reported that approximately 117,928 traders were liquidated over a 24-hour period, totaling roughly $206.39 million. The largest single liquidation involved a $3.03 million HYPE-USD position on the Hyperliquid exchange.
Thin liquidity during the weekend likely amplified both the downturn and the subsequent recovery, a pattern that has been observed in cryptocurrency trading on Sundays.
Lingering Sentiment and Future Outlook
Despite the recent upswing, market sentiment remains fragile. The Crypto Fear and Greed Index stood at 10, indicating extreme caution among traders. Investors are closely watching to see if the current bounce can develop into a more durable shift in momentum.
Bitcoin has fallen more than 33% since reaching a new record high above $126,000 in early October.