Bitcoin The recovery from last week’s sell-off is already hitting a wall.
After briefly falling to $60,000 in a capitulation-style move last week, the largest cryptocurrency returned to the $70,000 level over the weekend, but momentum has since faded.
That stagnation causes traders to reframe the bounce as a classic bear market pattern, a sharp relief rally that attracts dip buyers, only to be met with a wave of supply from investors looking to exit at better prices.
“There is still a lot of supply in the markets from those who want to exit the first rallying cryptocurrency,” FxPro chief market analyst Alex Kuptsikevich said in an email. “In such conditions, it is worth being prepared for a retest of the 200-week moving average soon.”
“We remain very skeptical about the near future, as the recovery momentum lost steam over the weekend, encountering a sell-off near the $2.4 trillion level. We may have just seen a bounce on the way down, which is not complete yet,” he added.
Sentiment data paints an equally fragile picture. The Crypto Fear and Greed Index sank to 6 over the weekend to reach the same levels as an FTX-led recession in 2022, before recovering to 14 late on Monday.
Kuptsikevich said those readings remain “too low levels for safe purchases,” arguing that the change reflects more than just temporary jitters.
Liquidity conditions add to the discomfort. With thinner order books, modest selling pressure can produce outsized moves, which then trigger additional suspensions and liquidations, a feedback loop that makes the price action appear disordered.
That dynamic, rather than a single headline, may explain why Bitcoin can swing thousands of dollars in a session and still fail to overcome a key resistance.
A Kaiko note on Monday described the backdrop as a broader easing of risk aversion. It said aggregate trading volumes on major centralized exchanges have declined about 30% since October and November, with monthly spot volumes falling from around $1 trillion to the $700 billion range.
The firm said that although there were some sharp bursts of trading last week, the broader trend has been a steady decline in participation. This indicates that traders, particularly retail investors, are gradually exiting the market rather than being forced out all at once.
When liquidity decreases in this way, prices can fall quickly due to relatively modest selling pressure, without the type of heavy, panic-driven volume that usually indicates a clear capitulation and a lasting bottom.
Kaiko also framed the move within the familiar logic of the four-year halving cycle. Bitcoin peaked around $126,000 in late 2025/early 2026 and has since pulled back sharply, with the pullback to the $60,000-$70,000 zone representing a drop of approximately more than 50% from the highs.
Historically, such lows can take months to develop and often feature multiple failed rallies.
For now, bitcoin’s ability to maintain the $60,000 area is the key. If buyers continue to defend it, the market may fall into choppy consolidation. Otherwise, the same liquidity-short dynamics that fueled the decline could quickly return, especially if broader macroeconomic conditions remain risk-averse.
