Bitcoin is gaining momentum again and has temporarily broken above the $75,000 mark, mirroring positive sentiment in stock markets. At first glance, it may seem the market is returning to strength, but beneath the surface, a number of unresolved signals remain that suggest a transitional phase rather than a clear trend reversal.
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Growth Against Market Structure
Despite current gains, bitcoin has been moving in a consolidation pattern for more than two months, which is often interpreted as a bearish flag or rising wedge. Whichever way we look at the structure, both scenarios suggest an increased risk of further decline.
A similar situation already occurred at the beginning of the year, when a comparable development was followed by a drop of tens of percent. The duration and character of the current formation are very similar, which raises the probability that the market is approaching a more significant move. However, this move may not point upward, but rather downward.
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Final Washout as the Foundation for Further Growth
For a new, sustainable growth trend to emerge, the market often needs to go through a final phase of significant decline. This process will eliminate weaker participants and create space for stronger capital, which can then stabilize the price and push it higher.
History shows that bitcoin commonly wipes out a large portion of previous gains during bear phases – often around 60 to 65 percent. In the current cycle, the level around $52,000 therefore appears to be a key area where a longer-term foundation could begin to form. If sufficiently strong demand enters at this level, it could signal further growth, much like what happened in the past with increased institutional interest from firms such as BlackRock.
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