Bitcoins the rebound from last week’s sales is already running into a wall.
After briefly slipping into the low-$60,000s in a capitulation-like move last week, the largest cryptocurrency rallied back toward the $70,000 level over the weekend, but momentum has since faded.
That stall has traders reframing the rejection as a classic bear market pattern, a sharp relief rally that draws in dip buyers, only to face a wave of bidding from investors looking to exit at better prices.
“There is still huge supply in the markets from those looking to exit the first cryptocurrency on the rebound,” FxPro chief market analyst Alex Kuptsikevich said in an email. “Under such conditions, it is worth being prepared for a retest of the 200-week moving average soon.”
“We remain very skeptical about the near term as the recovery momentum lost steam over the weekend and encountered a sell-off near the $2.4T level. Perhaps we have just seen a bounce on the way down that is not yet complete,” he added.
Emotional data paints a similarly fragile picture. The Crypto Fear and Greed Index dipped to 6 over the weekend to reach the same levels as an FTX-led 2022 low before rebounding to 14 late Monday.
Kuptsikevich said those readings remain “too low levels for safe buying,” arguing that the shift reflects more than temporary nerves.
Liquidity conditions increase the unrest. With thinner order books, modest selling pressure can produce large moves that then trigger further stop-outs and liquidations, a feedback loop that makes price action feel disordered.
This dynamic, rather than a single headline, may explain why bitcoin can swing thousands of dollars in a session while still failing to break through key resistance.
A Kaiko note on Monday described the backdrop as broader risk easing. It said aggregate trading volumes across major centralized exchanges have fallen by about 30% since October and November, with monthly spot volumes falling from about $1 trillion to $700 billion.
The firm said that while there were a few sharp bursts of trading last week, the broader trend has been a steady decline in participation. This suggests that traders, especially retail investors, are gradually exiting the market rather than being forced out all at once.
When liquidity thins like this, prices can slide quickly on relatively modest selling pressure, without the kind of heavy, panic-driven volume that usually signals a clear capitulation and a durable bottom.
Kaiko also framed the move within the familiar four-year halving cycle logic. Bitcoin peaked around $126,000 in late 2025/early 2026 and has since fallen back sharply, with the pullback to the $60,000-$70,000 zone representing an approx. 50%-plus extraction from the heights.
Historically, these bottoms can take months to develop and often feature multiple failed rallies.
For now, bitcoin’s ability to hold the $60,000 area is key. If buyers continue to defend it, the market could fall into a stuttering consolidation. If not, the same thin liquidity dynamics that fueled the washout could return quickly, especially if broader macro conditions remain risk-free.
