Bitcoin has reclaimed the $90,000 level for the first time in over a week, ending a multi-day stretch of weak performance that pushed it to a six-month low near $80,000.
However, even after the rebound, Bitcoin remains 21% down over the month. The selloff in November had triggered widespread risk-off sentiment across the crypto market. Total crypto market capitalization briefly dipped below $3 trillion, and the Crypto Fear and Greed Index spent almost two weeks in the “Extreme Fear” zone.
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Macro Conditions Improve
While crypto prices remained under pressure, U.S. equities saw a sharp recovery this week. The Dow, Nasdaq, and S&P 500 recorded their best four-day streak since May, boosted by strong earnings from Nvidia and renewed optimism about possible interest rate cuts.
Though concerns about inflation and Federal Reserve policy linger, market expectations for a December rate cut have risen. This broader risk-on mood has likely contributed to renewed interest in Bitcoin and other digital assets.
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Short Liquidations Accelerate the Move
The move above $90,000 was accompanied by increased trading activity and short liquidations. Over the last 24 hours, nearly $220 million in short positions were wiped out, according to CoinGlass data. The broader crypto market followed Bitcoin’s lead: Ethereum regained $3,000, and total crypto capitalization recovered to above $3.09 trillion.
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Technical Indicators Show Stabilization
For Bitcoin, momentum indicators are showing signs of recovery. RSI(14) has risen from 29 to 39, while RSI(7) is now close to neutral at 47. The Awesome Oscillator remains negative but has started to flatten, and the Money Flow Index (MFI) is still low at 17, reflecting limited inflow strength.
The current level of $90,358 also aligns with the 78.6% Fibonacci retracement from the recent move. A sustained break above this level could clear the way toward the 61.8% retracement near $98,019.
Despite the bounce, the ADX remains high at 47 – a sign that the broader trend, which has been downward, is still active. Until Bitcoin can hold above $92,000 or post a strong follow-through move, many analysts are treating this as a technical recovery rather than a confirmed trend reversal.
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Cautious Optimism
Although today’s breakout has improved sentiment, the broader picture remains mixed. The Fear and Greed Index has risen slightly from 10 to 15 but remains firmly in “Extreme Fear” territory. This suggests traders are still cautious despite improving market conditions, although the sentiment might improve with today’s gains.
As always, remember that the technical analysis provided in this article can help interpret current price action, but it remains limited in predicting external drivers like monetary policy, ETF flows, or macroeconomic data. Whether Bitcoin can extend its recovery in the coming days may depend more on developments outside the chart than within it.
