Bitcoin (BTC) experienced a significant rebound on March 11, surpassing $81,000 as U.S. stocks’ futures sought to recover from a tough sell-off. According to data from Cointelegraph Markets Pro and TradingView, the daily price gains for BTC approached 4%. This rebound occurred amidst growing concerns over recession risks, which led investors to abandon risk assets.
The recent trading session on Wall Street concluded with new four-month lows for both the S&P 500 and Nasdaq Composite Index, down 2.7% and 4%, respectively. However, Nasdaq 100 futures are currently showing a modest recovery of around 0.4%. The market’s volatile nature raises questions about whether a massive short squeeze is overdue, as suggested by trading resources like The Kobeissi Letter, which highlighted the current sentiment as being in “extreme fear” territory.
Market analysts argue that even those anticipating a prolonged bear market must recognize that relief rallies are a natural part of market movements. The potential for a short squeeze to occur, as historically, markets do not move in a straight line, is becoming increasingly probable.
Timothy Peterson, an economist and creator of several Bitcoin price forecasting tools, also indicated a favorable outlook. He suggested that there is an 89% chance that the recent low could represent the bottom of the market, drawing attention to unusually high readings from the VIX volatility index.
On a shorter time frame, Bitcoin’s recent movements have shown promise, having encountered a bullish divergence on the 4-hour chart. Popular trader Cas Abbe noted positive signals from the relative strength index (RSI) and mentioned that while he does not predict an immediate decisive reversal, a short-term pump appears imminent.
Despite these glimmers of hope, some market participants remain cautious. Various analysts, including the pseudonymous trader HTL-NL, expressed doubts about Bitcoin reaching new all-time highs, drawing parallels to the broader economic climate. He emphasized that the challenges facing Bitcoin are reflective of a more extensive recession affecting all risk-off assets, warning that the U.S. economy faces a tough period ahead.
In conclusion, while Bitcoin’s recent resurgence offers some optimism, market dynamics influenced by macroeconomic factors remain a substantial hurdle. Investors should proceed with caution, performing their due diligence and remaining informed about market conditions.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
