Bitcoin reclaimed the $71,000 level on Monday following a historic plunge in market sentiment. Analysts are divided on whether extreme fear and a large concentration of short positions will spark a rebound or if structural weakness and selling pressure will push the price below its key $60,000 yearly low.
Bitcoin pushed back above $71,000 after the Crypto Fear & Greed Index dropped to a record low of 7, signaling “extreme fear” across the market. Michaël van de Poppe of MN Capital said such sentiment readings have previously marked market bottoms, including during the 2018 bear market and March 2020 crash.
Data from CoinGlass adds a potential bullish catalyst, showing over $5.5 billion in cumulative short liquidations positioned above current prices. This imbalance suggests an upward move could trigger forced shorts covering and fuel a rally.
Conversely, CryptoQuant data shows Bitcoin trading below key moving averages with a negative Price Z-Score of -1.6, indicating selling pressure and trend exhaustion. Analyst Darkfost highlighted a sharp negative shift in monthly net taker volume to -$272 million, signaling rising derivatives selling pressure.
Investor Jelle noted that past Bitcoin bear market bottoms have formed below the 0.618 Fibonacci retracement level. For the current cycle, this technical level sits near $57,000, with deeper scenarios extending toward $42,000 if historical patterns repeat.
