 ▲ Bitcoin (BTC) |
Market attention is focused on whether Bitcoin (BTC) can break its year-to-date downtrend and succeed in rebounding by replicating a historic bullish pattern.
According to crypto media outlet The Crypto Basic on February 10 local time, Bitcoin followed a 10.16% decline in January with an additional 12.55% drop so far in February, placing it at a critical crossroads. Historical data show that whenever Bitcoin closed January in the red, it tended to rebound in February, with notable examples in 2015, 2016, 2018, 2019, and 2022. If it were to end this February in decline as well, it would mark the first time in Bitcoin’s history that it has fallen for two consecutive months of January and February.
Current market fear indicators have fallen to record lows, reflecting extreme pessimism. Michael van de Poppe, founder of MN Capital, noted that the Crypto Fear and Greed Index has dropped to an all-time low of 5, while Bitcoin’s Relative Strength Index (RSI) has fallen to 15, entering deeply oversold territory. He compared the current environment to the 2018 bear market and the March 2020 COVID-19 crash, suggesting that Bitcoin could form a bottom without retesting the $60,000 level.
Derivatives market data also point to the possibility of a sharp rally driven by a short squeeze. According to CoinGlass, if Bitcoin’s price rises by around $10,000, approximately $5.45 billion worth of short positions could be liquidated. By contrast, a drop to $60,000 would trigger liquidations of about $2.4 billion, indicating that upward price moves could generate greater volatility.
However, many caution that technical indicators still call for prudence. Data from CryptoQuant show that Bitcoin is trading well below its 50-day moving average of $87,000 and its 200-day moving average of $102,000. The Price Z-Score, an indicator comparing market value to realized value (MVRV), also stands at -1.6, remaining below the statistical average. This suggests that sideways consolidation may persist for some time rather than a clear trend reversal.
From a longer-term perspective, investors are watching Fibonacci retracement levels to identify downside support. Crypto investor Gelle pointed out that bottoms in past bear markets were typically formed below the 61.8% Fibonacci retracement level, advising that if the $57,000 area breaks in this cycle, the possibility of an additional drop toward $42,000 should be considered. Ultimately, whether Bitcoin can maintain its seasonal strength pattern and spark a rebound during February is expected to be the key factor shaping the market’s direction.
Disclaimer: This article is provided for investment reference only, and no responsibility is taken for any investment losses incurred based on this content. The information should be interpreted solely for informational purposes.