Bitcoin (BTC) pushed back above $71,000 on Monday, after market sentiment indicators across the crypto market dropped to new lows.
Some analysts believed that “extreme fear” and upside liquidity may help Bitcoin hold above its yearly-low at $60,000, but others warned that weak market conditions and bearish futures volume may push prices even lower.
Key takeaways:
The Crypto Fear & Greed Index dropped to a record low of 7, showing extreme fear in the market.
More than $5.5 billion in short liquidations above current prices may fuel a rebound.
Weak price trends and rising derivatives selling may still drag Bitcoin below $60,000.
Sentiment and liquidation suggest $60,000 remains support
MN Capital founder Michaël van de Poppe said Bitcoin is flashing sentiment readings that have previously marked market bottoms. According to Van De Poppe, the Crypto Fear & Greed Index had dropped to 5 over the weekend (final recorded reading is 7), its lowest reading in history, while the daily relative strength index (RSI) for BTC has fallen to 15, signaling deeply oversold conditions.
These levels were last seen during the 2018 bear market and the March 2020 COVID-19 crash. Van de Poppe said such conditions may allow BTC to recover and avoid an immediate retest of the $60,000 level.
CoinGlass data adds to the bullish case. Bitcoin’s liquidation heatmap shows over $5.45 billion in cumulative short liquidations positioned if the price moves roughly $10,000 higher, compared with $2.4 billion in liquidations on a retest of $60,000.
This imbalance suggests that an upward move may trigger forced shorts covering, leading to a BTC rally.
Related: Bitcoin circles $70K as Coinbase Premium sees first green spike in a month
BTC structural weakness keeps downside risks in focus
Data from CryptoQuant shows Bitcoin trading below its 50-day moving average near $87,000, while further below the 200-day moving average around $102,000. This wide gap reflects a corrective or “repricing” phase following the prior rally.
CryptoQuant’s Price Z-Score is also negative at -1.6, indicating BTC is trading below its statistical mean, a sign of selling pressure and trend exhaustion. Such conditions have preceded extended base-building rather than immediate rebounds.
Crypto analyst Darkfost highlighted a growing selling dominance in the derivatives markets. Monthly net taker volume has turned sharply negative at -$272 million on Sunday, while Binance’s taker buy-sell ratio has slipped below 1, signaling a strong selling pressure.
With futures volumes outweighing spot flows at the moment, stronger spot demand is needed to trigger a bullish reaction from BTC.
Adding a longer-term caution, Bitcoin investor Jelle noted that past Bitcoin bear market bottoms formed below the 0.618 Fibonacci retracement. For the current cycle, that level sits near $57,000, with deeper downside scenarios extending toward $42,000 if history repeats.
Related: Saylor’s Strategy buys $90M in Bitcoin as price trades below cost basis
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