Bitcoin fell by about 14% in one day and tested key psychological support at $60,000. We haven’t seen such sharp movements in a long time, and they are reminiscent of market phases when emotions completely take over rationality. The question remains whether this is an attractive buying opportunity or just a short pause before another decline.
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What the market really showed
Volumes on the spot market were exceptionally high during Thursday’s sell-off, last seen during the correction in April 2024. This time, however, the key difference was in the nature of the daily candle. The market closed completely red with no significant upper shadow, clearly signaling the complete dominance of sellers and minimal willingness on the part of buyers to intervene.
The combination of extreme volumes and a clearly bearish structure is a very negative signal from a technical perspective. The impact of the decline is also visible on publicly known entities. Strategy, which has long held Bitcoin as its main reserve asset, has incurred significant unrealized losses in the billions of dollars as a result of the price decline. This shows that even institutional players are not immune to market cycles.
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Or we are in for an even more painful phase
Bitcoin is currently trading more than 52% below its all-time high and is very likely in the third wave of a bearish trend. This phase is historically the most painful. Despite extreme oversold conditions, selling pressure continues unabated, while buyers remain on the defensive and respond mainly to technical rebounds.
The current return of the price above $70,000 can be seen more as a relief rally than a confirmation of the bottom. Moreover, history shows that Bitcoin has never rebounded overnight after sharp sell-offs. The bottom is a process that usually takes months, not days, to form. The current development should therefore serve primarily as a warning against underestimating risk and a reminder that price development is information, not wishful thinking.
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