The crypto market is showing tentative signs of a recovery following a bruising sell-off, leaving traders grappling with a critical question.
The upward swing saw Bitcoin bounce from Wednesday’s intraday low of $99,600 to trade around $103,400, according to CoinGecko data.
But is it the start of a sustainable rebound or a temporary respite before further declines?
“Liquidity behind Bitcoin is starting to make a recovery,” on-chain analyst Willy Woo wrote in a tweet on Wednesday, suggesting that a price confirmation could follow in two weeks.
Bitcoin has shed roughly 25% from its October peak, pushing the supply of coins held at a loss to 28.1%, CryptoQuant data shows.
Historical data show that such supply losses have often preceded price reversals. A spike in this metric to 27% in April 2025 preceded a 70% rally in Bitcoin. Back in September 2024, it kicked off a 125% surge.
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Still, some analysts caution that the current bounce lacks the hallmarks of a proper recovery.
“What we are looking at right now is a technically driven rebound, being supported by spot inflows and leveraged short-covering,” Shawn Young, Chief Analyst at MEXC Research, told Decrypt. “So it’s not necessarily a resurgence of long‑term conviction.”
The market needs to see consistent on‑chain accumulation by long‑term holders and stabilized funding rates for this bounce to become an enduring bottom, Young said.
“The recent relief bounce could come across as active dip‑buying, but it is not yet eligible to be considered a full‑scale recovery signal,” Young added.
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For bulls, the $100,000 zone is forming as a potential accumulation range that could fuel a mid‑term recovery into 2026, Jiehan Chen, Operations Onboarding Lead Analyst at Schroders, told Decrypt. The weekly candlestick close needs to hold above $103,000, he said.
For bears, the current uptick is a standard bear market bounce within a cooling cycle. If the trend persists, the dip buying zone could extend from $93,000 to $88,000, experts previously told Decrypt.
The recent drop has also caused Alex Thorn, head of research at crypto investment and infrastructure company Galaxy Digital, to lower his end‑of‑year target for Bitcoin from $185,000 to $120,000, signaling tempered expectations after the recent selloff.
The deciding factor or pivotal catalyst that could put this outlook on its head is the macro backdrop. Chen expects a period of choppiness ahead unless a positive catalyst, like an end to the government shutdown, changes the underlying economic outlook.