Key Points
- The move followed a sharp 10% weekly drop, with price action now influenced by technical reversals, institutional purchases, and improving on-chain metrics.
- A bullish RSI divergence on the 4-hour chart suggested weakening bearish momentum.
- El Salvador acquired roughly 1,090 BTC near $90,000, marking its largest single-day buy since 2022.
- Miners showed signs of holding rather than selling, supported by a 241% year-over-year increase in Canaan’s Q3 mining revenue.
- The MVRV ratio dipped to -11.5%, placing Bitcoin firmly in historical “accumulation zones.”
- Despite these positive signals, Bitcoin ETFs recorded $3 billion in outflows over three weeks, and macroeconomic headwinds persist.
Technical Reversal Signals Emerge Amid Downtrend Fatigue
Bitcoin’s recent price action reveals a subtle but meaningful shift in short-term momentum. After sliding nearly 10% over the week, the asset found support near $89,250 and bounced sharply. On the 4-hour timeframe, the Relative Strength Index formed a textbook bullish divergence: price carved out a lower low while the oscillator printed a higher low. This classic technical pattern often precedes trend exhaustion and potential reversal, especially after extended downside moves. The rebound also coincided with the 61.8% Fibonacci retracement level hovering around $93,250, adding confluence to the technical setup.
Traders interpreted this confluence as a signal that selling pressure may be waning. The immediate resistance now sits just above current levels at $93,350, with a more decisive breakout requiring a daily close beyond $94,200. Should that threshold hold as support after a confirmed move above it, the bearish short-term structure could dissolve, opening the door to a retest of prior highs. Conversely, failure to hold ground might invite another probe toward the $89,250 zone. The next few sessions will determine whether this rally reflects genuine demand or merely a reflexive bounce.
Strategic Accumulation Meets Lingering Institutional Caution
On the fundamental side, state-level and miner behavior offered a dual narrative of conviction and caution. El Salvador executed its most aggressive Bitcoin purchase since 2022, deploying approximately $100 million to acquire 1,090 BTC near the $90,000 mark. This move underscores the nation’s long-term commitment to Bitcoin as a reserve asset and sends a strong psychological signal to the market. Simultaneously, mining economics improved markedly, with one major manufacturer reporting a staggering 241% year-over-year jump in Q3 revenue. Stronger margins typically reduce the incentive for miners to immediately sell newly minted coins, thereby decreasing near-term sell-side pressure.
Yet these bullish undercurrents coexist with visible institutional hesitancy. Bitcoin ETFs have seen net outflows exceeding $3 billion over the past three weeks, revealing that asset managers and large investors remain risk-averse. Adding to this caution, on-chain data shows large holders repaying debts—evidenced by notable ETH liquidations—suggesting a broader deleveraging trend among sophisticated players. While El Salvador’s purchase and miner hoarding provide structural support, they may not be sufficient to offset sustained ETF redemptions unless macro conditions stabilize.
Sentiment Extremes Create a Tactical Buying Window
Market sentiment has plunged into deeply negative territory, creating conditions historically conducive to accumulation. The 30-day MVRV (Market Value to Realized Value) ratio recently hit -11.5%, a level that typically signals undervaluation. At this point, a significant portion of the supply is underwater—approximately 15% of Bitcoin holders are sitting on unrealized losses, a figure that climbs to 42% for XRP. Coupled with the Fear & Greed Index registering a mere 16 (“Extreme Fear”), these metrics often precede mid-term rallies, as contrarian investors step in to capitalize on panic-driven selloffs.
However, historical patterns do not operate in a vacuum. Current macro risks—including rising U.S. fiscal tensions, potential government shutdowns, and escalating tariff disputes—introduce considerable uncertainty. While retail traders may be “buying the dip” based on technical and sentiment cues, whales and institutions appear to be waiting on the sidelines. This divergence between retail optimism and institutional restraint suggests that any sustained upside will likely require either a macro catalyst or a decisive break above key resistance levels to reignite broader confidence.
Conclusion
Bitcoin’s current rebound stems from a confluence of technical exhaustion, targeted accumulation by nation-states and miners, and deeply oversold sentiment metrics. Together, these forces have provided a floor beneath price and sparked short-term optimism. Yet persistent ETF outflows and unresolved macroeconomic tensions create a ceiling that has so far capped meaningful upside. The critical juncture lies ahead: a decisive move above $94,200 could invalidate the recent bearish structure and invite fresh momentum, while a failure to hold gains might usher in another leg lower. For now, the market remains in a state of fragile equilibrium—balancing opportunity against caution.
