Bitcoin Attempts a Rebound After Falling Below $81,000

Bitcoin is navigating turbulent waters as November comes to an end. After a sharp drop below $81,000, the cryptocurrency attempts a timid recovery around $88,000. Traders are now scrutinizing technical signals while a “death cross” looms over daily charts. The Thanksgiving week promises its share of macroeconomic turbulence. Will BTC manage to reclaim $100,000?

Contradictory technical signals fuel the debate

Bitcoin has just experienced a “death cross” on November 15. This signal appears when the 50-day moving average falls below the 200-day moving average. Historically, this phenomenon often signals tough times.

However, analyst Benjamin Cowen tempers this: “Previous bearish crosses have marked local market lows.” In other words, this signal could paradoxically indicate a bottom rather than an imminent collapse.

Traders are now scrutinizing every move intensely. The $88,000 threshold currently acts as an insurmountable ceiling. BitBull, a well-known trader, nevertheless observes encouraging signs: 

“Bitcoin has regained control of the 20-period moving average on the 4-hour chart for the first time in two weeks.”

This technical reconquest, modest as it may be, fuels hope of a rebound towards $105,000 or $110,000 if the weekly close exceeds $92,000.

Michaël van de Poppe adopts an even more optimistic stance. He compares the current situation to the FTX collapse at the end of 2022, which paradoxically marked the trough of the last bear market. 

“The current sentiment and indicators are much more bullish than during the FTX affair“, he asserts. According to him, trading between $90,000 and $96,000 seems likely this week. But beware: without a quick rebound, the 200-day moving average could become the next downside target, erasing all hopes of an immediate bullish recovery.

The battle between long-term holders and new speculators

Market behind-the-scenes reveal a massive transfer underway. Data from CryptoQuant show that 63,000 bitcoins have recently changed hands. 

Long-term holders, those owning their coins for more than 155 days, are selling massively. Conversely, newcomers are accumulating frantically, attracted by what they perceive as a buying opportunity.

This dynamic illustrates a classic crypto market phenomenon. Veterans take profits after the surge to $108,000 earlier this month. Speculators, often driven more by emotion than strategy, pick up these coins “at high prices” according to CryptoOnChain’s expression. 

The SOPR ratio for short-term holders plunged below 0.927 this weekend, its lowest level in 15 months. This figure means a significant proportion of these recent traders are already selling at a loss.

The Fed at the heart of a decisive week

Yet, some experts see the early signs of a turnaround. Ignacio Aguirre, marketing director at Bitget, believes that “Bitcoin’s rebound this weekend could be a harbinger of a broader market recovery rather than a bull trap. Historically, November shows average gains of about 42% for BTC.” 

The easing of retail capitulation indeed suggests the market might be forming a short-term bottom.

Thanksgiving week, though shortened, promises to be electric for markets. The September producer price index, the PCE index, and third-quarter GDP figures are arriving in quick succession. 

These economic data will shape expectations about the Federal Reserve’s monetary policy. The odds of a rate cut in December hover around 70% according to the CME Group’s FedWatch tool. Confirmation of this scenario could give wings to risk assets like Bitcoin.