Bitcoin [BTC] had a quiet weekend after exhibiting extreme volatility last week. The bounce from $60k reached a local high of $72.1k on Sunday, the 8th of February. The usual late-Sunday volatility did not arrive this time.
Monday’s New York trading session could spark the next short-term impulse move for Bitcoin. Traders can wait until this move gives us a rejection from the $72k-$74k local supply zone, or an acceptance above it.
Is Bitcoin’s price bounce faltering?
The 4-hour chart showed that Bitcoin’s price was still in a bearish trend. The $71.9k and $75.1k were the 61.8% and 78.6% retracement levels based on the earlier bearish swing move.
The MACD was approaching the zero line and could soon form a bullish crossover. However, the OBV was unable to climb toward the recent highs. This showed that the bounce occurred on relatively low trading volume compared to the move downward.
Therefore, traders can maintain a bearish bias and use the Bitcoin price bounce to go short. A move above $79.3k would shift the H4 market structure bullishly, invalidating the short setup.
The liquidation clustered around the $72k area over the past three days has been swept, but the Bitcoin price did not see a swift bearish reaction. It continued to hover above the $70k mark.
This was suspicious and hinted at the potential that an extended short squeeze could be engineered. In this scenario, Bitcoin can rally to $80k to hunt down the overhead short liquidations before resuming its higher timeframe downtrend.
Retail panic drives sell pressure
The small Bitcoin holders are usually reactive to price moves. The shrimp category of holders (<1BTC) exhibited increased exchange inflows in the aftermath of the October Bitcoin price crash.
Similarly, the drop over the past three weeks also brought heavy inflows to Binance, pointed out analyst Darkfost.
Buy or sell pressure from this segment of the market does not dictate where prices go, but it is interesting to note that retail sentiment was extremely bearish in recent days. This segment has also been sidelined for the most part during the price advance in 2025, unlike previous cycles.
Final Thoughts
- There is a chance of an extended Bitcoin bounce to hunt down the liquidity up to $80k.
- Small retail investors panicked during the October crash and the past week’s breakdown, who have been less active this cycle compared to the earlier ones.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
