The $70,000 barrier: Bitcoin rebound stalls, market sentiment at levels of fear comparable to 2022

Bitcoin (BTC) recent price movements are dampening investors’ optimistic outlooks. After recovering from recent lows to reach $70,000, momentum has quickly weakened, and current BTC prices have fallen to around $67,200. This stagnation is not just a technical correction but highlights deeper structural issues in the market.

Rebound as a Bearish Pattern

According to FxPro Chief Market Analyst Alex Kuptsikevich, the rebound around $70,000 is recognized as a typical bearish market pattern among market participants. In other words, sharp bounces in a downtrend attract dip-buying investors but are met with profit-taking selling pressure.

He states, “The selling pressure from investors wanting to exit Bitcoin during the rebound phase remains very high,” warning of a potential retest of the 200-week moving average in the near future. If these technical levels are broken, further downward adjustment pressures could increase.

Vulnerability Indicated by the 2022 Sentiment Index

A more concerning sign appears in market sentiment indicators. The Crypto Fear & Greed Index dropped to 6 during recent panic selling—levels comparable to those during the FTX collapse in 2022. Although it has since recovered to 14, Kuptsikevich notes, “This level is still too low to confidently consider it a buying opportunity.”

Extreme pessimism in this sentiment index suggests market participants are psychologically exhausted. The presence of fear levels similar to those during the 2022 collapse indicates this correction could have more severe consequences.

New Risks from Liquidity Crisis

An additional problem is the rapid deterioration of market liquidity. According to a report by Kaiko, trading volume across major centralized exchanges has decreased by about 30% over recent months, with monthly spot trading volume dropping from $1 trillion to around $700 billion. This liquidity crunch creates an environment where even small sell-offs can trigger excessive price swings.

The concern is that the thin order books may cause small sales to cascade into stop-outs and liquidations, creating a feedback loop that accelerates further price declines. Without the typical “panic-driven volume bottoming” pattern, relatively mild selling pressure could still lead to sharp price drops.

$60,000 as the Last Bastion: Future Scenarios

Bitcoin has corrected from a peak of approximately $126,000 in previous cycles to current levels, with $60,000 serving as a critical support level. If buyers continue to defend this level, the market may experience choppy movements but gradually transition into a correction phase.

However, if $60,000 breaks, especially in a risk-off macro environment, there is concern that a sudden decline could occur in a low-liquidity setting. Historically, forming a bottom at this level takes several months, often involving multiple failed rebounds. Currently, the market lacks a clear direction, and it is expected to continue oscillating between resistance above $70,000 and support at $60,000.