Bitcoin Battleground: Bulls vs. Bears as ‘Golden Dip’ Emerges Again

Following a period of dramatic price swings, risk assets rebounded.

Data from Bitpush shows that Bitcoin (BTC) surged from local low of $81,500 to over $90,000, marking a near 10% intraday gain. Concurrently, At the close of U.S. stocks on Wednesday, the Dow Jones Industrial Average initially closed up 1.1%, the S&P 500 rose 1.1%, and the Nasdaq rose 1.46%.

Market Sentiment Grapples with Macroeconomic Headwinds

The market remains in a state of flux. After rebounding from a low of $78,000 on February 21st to $95,000, Bitcoin subsequently retreated to around $81,000. This price action underscores the ongoing tug-of-war between bullish and bearish forces, leaving market direction uncertain. While initial market optimism was spurred by pro-crypto statements from President Trump, this sentiment proved fleeting and failed to overcome underlying market vulnerabilities. Lingering macroeconomic risks continue to cast a shadow over the market.

Ki Young Ju, CEO of CryptoQuant, suggests that Bitcoin’s market conditions may remain subdued until a tangible improvement in US market sentiment materializes. Amidst regulatory uncertainties, a complex macroeconomic landscape, and fluctuating investor sentiment, the long-term sustainability of Bitcoin’s high valuation remains questionable. In the absence of stronger catalysts, Bitcoin may persist in range-bound trading with heightened volatility, requiring investors to closely monitor market dynamics for decisive directional signals.

Bulls Face Stiff Resistance Below $90,000

Despite multiple attempts to rally, Bitcoin and the broader cryptocurrency market have encountered persistent headwinds, failing to establish a sustained upward trajectory. Analysts have cautioned that bulls must act decisively and reclaim key price levels to avert further downside risk.

However, Ki Young Ju posits that it may be premature to declare the bull cycle over. CryptoQuant’s on-chain data indicates that market activity remains relatively muted, with key metrics exhibiting neutral signals. This suggests that despite recent price weakness, the overarching bull market structure may still be intact. Furthermore, robust fundamentals, evidenced by the continued deployment of new mining hardware, reflect sustained confidence in Bitcoin’s long-term prospects among key participants.

Ju further contends that a premature conclusion to this bull cycle would likely be unwelcome by major stakeholders, including early whale investors, mining conglomerates, traditional financial institutions, and even President Trump, who has publicly voiced his support for cryptocurrencies. Retail investors, typically considered late-cycle participants, are unlikely to be the primary drivers of market direction at this juncture.

Historical Patterns in Play?

Analysts at TradingView identify $85,000 as a critical near-term support level for BTC, a level that has played a pivotal role in recent market dynamics.

Should Bitcoin consistently trade below $85,000 in the coming days, it could trigger a more substantial sell-off, intensifying downward pressure and potentially confirming a bearish trend. This scenario would expose Bitcoin to the risk of testing lower support levels.

Quinten, an analyst on X, points to historical context, suggesting that past bull cycles offer valuable insights. During the previous bull run, Bitcoin underwent seven notable corrections, ranging from -17% to -51%. While each correction sparked fear and bearish sentiment, Bitcoin ultimately overcame these setbacks and continued its ascent. History, while not repeating itself precisely, often rhymes.

In summary, the $85,000 and $90,000 price points are poised to be focal points of contention between bulls and bears in the near term. Investors should closely monitor price action around these levels to gauge the market’s next directional move.

According to analyst MasterAnanda, the current market dynamics are “interesting” and reveal several noteworthy signals:

• Potential Bottom Confirmation: Bitcoin’s sharp V-shaped recovery from a 28% correction off its $109,000 all-time high, bottoming at $78,300 last week, is often interpreted as a sign of a potential market bottom, reducing the likelihood of further significant near-term declines.

• Healthy Bull Market Correction: Corrections are a natural and expected part of robust bull markets. These pullbacks serve to digest prior gains, allowing the market to consolidate and build momentum for subsequent advances. Sustainable long-term growth necessitates periods of consolidation.

• “Golden Buying Opportunity” Emerges: The current market pullback presents a compelling entry point for sidelined capital. For those who missed Bitcoin’s rapid ascent from $85,000 to $95,000, the current levels may offer an attractive opportunity to establish positions at a relatively lower price. Markets invariably offer second chances, and corrections are crucial accumulation phases within bull cycles.

• Long-Term Bullish Trend Remains Intact: Bitcoin’s long-term growth trajectory remains fundamentally unchanged. Historical patterns suggest Bitcoin is poised to resume its upward momentum in the coming months, potentially targeting analyst forecasts of $120,000 next month.

• Technical Indicators Provide Support: Analysis of Bitcoin’s daily chart reveals the 200-day moving average (MA200) acting as a support level, a key technical indicator widely regarded as a barometer of long-term trends in cryptocurrency markets. The formation of higher lows further suggests an impending bullish trend confirmation.

• Market Sentiment and Capital Inflows Poised to Drive Gains: The current market cycle is not solely predicated on US government policy or geopolitical events but is also driven by inherent cyclical market forces. Bitcoin appears poised to enter a new growth phase, with potential to reach new all-time highs in 2025. Furthermore, substantial capital reserves are waiting on the sidelines, ready to deploy and propel the market higher upon signs of stabilization and renewed upward momentum.

In conclusion, Bitcoin may have established a near-term bottom, with the market currently undergoing a consolidation and accumulation phase. While short-term volatility is anticipated, the long-term bull market trend remains robust. Investors may consider leveraging the current pullback as a strategic entry point to accumulate positions at relatively lower prices, maintaining a patient, long-term perspective as the market navigates its next directional phase.

By Bitpush Mary Liu

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