Bitcoin Bounces Back: Can Bullish Momentum Hold or Has the Market Topped?

After a gut-wrenching 48 hours for Bitcoin investors that saw the price of BTC briefly dip below $100,000 for the first time since May, the cryptocurrency markets are showing signs of life again.

More than $2 billion in total crypto liquidations during yesterday’s flash crash, mostly from long positions, represents one of the largest flush-outs of leveraged positions this year.

This event seems to have marked at least a temporary bottom, removing skittish investors and overleveraged traders. The total market capitalization of Crypto has since rebounded to $3.5 trillion, showing a solid gain of 3.5% in the last 24 hours. according to CoinGecko.

Traditional markets provide a mixed backdrop for the crypto rebound. U The S&P 500 gained 0.7% on Wednesday after Tuesday’s selloff, with the Nasdaq Composite advancing 0.9% as AI shares rebounded from valuation concerns. However, the ongoing US government shutdown – now the longest in US history at 31 days – continues to create uncertainty over economic data releases and policy decisions.

Despite the doom and gloom on social media, and even some analysts lowering their price targets, Bitcoin sentiment has turned at least marginally bullish. Myriada prediction market built by Decrypt’s the parent company Dastan. At the moment, Myriad users say that there is a 67% chance Bitcoin will return to $115K instead of bleeding up to $85,000.

Are the forecasters right, or is there a little too much copium in the air? Here’s what the charts say.

Bitcoin (BTC) Price: Potential Reversal in Sight

Bitcoin is currently trading at $103,824, having recovered from Tuesday’s drop below $100,000 — the first time the leading cryptocurrency has breached that level since May. The 24-hour price action is showing resistance, although volume remains high as traders seem wary of declaring the all clear.

The technical picture shows bearish exhaustion, but it is not enough for a bullish breakout.

The Relative Strength Index, or RSI, for Bitcoin is at 38 points, which is in oversold territory. RSI measures market momentum on a scale of 0 to 100, where readings below 30 signal oversold conditions and above 70 suggest overbought.

At 38, Bitcoin’s RSI indicates that selling pressure is waning, and bargain hunters typically start building positions at these levels. However, the Average Directional Index, or ADX, is only at 20.33, which hardly suggests that a trend exists at all. ADX measures the strength of the trend: above 25 means a strong trend, below 20 signals choppy action, without direction. Bitcoin’s weak reading means the market lacks conviction.

The exponential moving averages are another key indicator: these metrics give traders a sense of price supports and resistances by taking the average price of an asset in the short, medium and longer term.

For Bitcoin at the moment, the shorter moving average, the 50-day EMA, is above the longer moving average, the 200-day EMA. It is normally bullish, as the pattern forms what traders call a “golden cross”.

However, the current price of Bitcoin is trading below both averages. This setup usually indicates a panic episode, and if prices don’t recover quickly, the 50-day EMA will begin to descend towards a “death cross” – when long-term prices exceed short-term prices, signaling a potential long-term trend reversal. In other words, if this happens, it would signal that the bull run may indeed be over. But we are not there yet.

The Squeeze Momentum sparing short confirms the recent breakout released compressed energy, suggesting consolidation before the next major move.

At this stage, traders can opt to watch for a decisive daily close above $105,000 with strong volume to confirm the reversal towards $110K. Failure to hold $102,000 could trigger a retest of the critical $100,000 level. Now, most of the indicators – weak ADX, bearish squeeze, ETF outflows, and the current price below the two EMAs – suggest that Bitcoin needs to find a lower base before any sustainable rally can begin.

The only salvation for Myriad bulls is that these two premises are true:

• Prices find support around the $90K mark before pulling back, which seems the most likely scenario.
• This is not the beginning of a crypto winter (basically a change of trend to multi-month bearish behavior), which is still too early to call. But if history repeats itself, 2026 could be a cold year.

Key levels to watch:

• Immediate Resistance: $105,000 (former support zone and psychological level)
• Strong Resistance: $108,000-$109,000 (recent consolidation zone and major rejection zone)
• Immediate Support: $102,000 (low area and recent accumulation)
• Strong Support: $100,000 (psychological level and major options are concentration)