Bitcoin is showing signs of recovery after the sharp decline and mass liquidations it experienced early last week.
Bitcoin rises to $87,500 despite weak market structure
The world’s largest cryptocurrency rose 1.8% in the past 24 hours to $87,645. By Friday, the price had fallen to around $81,000, causing panic in the market.
Not only Bitcoin, but other major cryptocurrencies are also on a recovery trend. Ethereum is trading up 0.5% at $2,834, XRP is up 2.65% at $2.09, and Solana is trading up 2.5% at $133. The market capitalization of all cryptocurrencies also rose by 1% in the past 24 hours.
Analysts have described the rise as a “rapidly reactive rise based on weak fundamentals.”
Vincent Liu, chief investment officer at Cronos Research, said the current price movement is “shallow liquidity, fragmented flows, and a post-flash rally with long-term investors accumulating.” Liu said Bitcoin could enter a period of severe consolidation in the $85,000 to $90,000 range in the short term.
Market sentiment remains weak, with the Fear and Greed Index currently at 19 points, down from 13 at the beginning of the week and still in “extreme fear” territory.
According to Rachel Lucas, an analyst at BTC Markets, Bitcoin is in a correction phase following the sharpest correction of the economic cycle. Lucas said while it’s positive that prices have remained above $86,000, the market structure remains fragile.
According to analysts, a sustaining above $88,000 will confirm the formation of a bottom. Otherwise, the price could fall back to the $80,000 level.
Lucas also emphasized that long-term investors are still relying on Bitcoin-specific demand, while short-term investors are closely monitoring funding rates and liquidation levels. For institutional investors, he said this was not an exit but a “rotation period” and that ETF outflows were also considered within the scope of risk management.
*This is not investment advice.
