Bitcoin price just concluded another week in the red, but the bears have eased off their assault in the last 24 hours. Is the cryptocurrency finally ready for a solid rebound, especially now that it is more discounted?
Bitcoin price just went through another massive selloff this past week. The cryptocurrency has maintained an overall downtrend since October. As expected, previous bearish capitulations have cultivated more skepticism in the cryptocurrency’s bullish prospects.
Although downside risks remained active, there were multiple signals that may point towards a potential pivot. The Bitcoin short-term holder MVRV, for example, indicated that the cryptocurrency may be in a reversion zone where a pivot is likely to occur.
The indicator recently dropped to its 12-month support level. Price bounced back at least three times after retesting the same zone.
It was, however, worth noting that there were a few times where the Bitcoin price extended its retracement and the indicator went even lower.
Was Bitcoin Price Oversold at Recent Lows?
Previously observed data highlighted a potential Bitcoin price support wall near $94,000. We also observed a significant demand spike from BTC whales on Friday.
The Bitcoin price was up over 1.5% at the time of observation. By definition, the cryptocurrency was not yet overbought since its RSI bottomed out at 30. However, recent data also pointed towards an oversold sentiment across the market.
A CryptoQuant analyst noted that Bitcoin price’s Puell multiple has been ranging between 0.9 and 1.3 ever since the price pushed above $90,000. Moreover, BTC has been bouncing back when the Puell multiple dropped to the 0.9 level.
According to the latest data, Bitcoin’s Puell Multiple dropped to 0.92. This could indicate that BTC was oversold based on this indicator and that it was at or near its bottom range.
Long-term holders contributed most of the recent sell pressure. BTC bulls may therefore have a decent chance at recovery if the same sellers shut off the outflow taps.
Here’s What to Look out for When Assessing Bitcoin Recovery Prospects
The indicators mentioned above signaled that BTC may be at or near a local bottom. However, there were still some risks of further downside, with the next key support levels near $84,000 and $75,000.
Sharp Bitcoin price rebounds have almost always followed every sharp bearish move. The cryptocurrency’s latest crash may fit that description.
The cryptocurrency demonstrated aggressive demand from whales on Friday. However, that demand wave cooled down in the last 24 hours. This may indicate weak demand follow-through, in which case the price might enter another indecisive sideways pattern.
The overall spot net flows were still in the red in the last 24 hours, by about $24.6 million. In other words, aggressive demand was not the order of the day.
Moreover, Bitcoin ETFs recorded $492 million worth of outflows. This indicated that ETFs were not confident of a strong weekend bounce back.
Meanwhile, the fear and greed sentiment was down to 10, hence the market was in extreme fear. This was the lowest point that the index achieved in the last 12 months.
The last time the market sentiment was that low was on 27 February 2025. BTC price responded with a sizable but limited bounce back then, and could be gearing up for a similar move now. However, weak demand from whales and long-term holders could also underscore more BTC downside risks.