Bitcoin has staged a swift recovery to $113,900 on Wednesday after briefly testing the $111,000 mark during the Asia trading session. This bounce comes after BTC swept below Monday’s low of $111,500, marking an early attempt at mid-week recovery with emerging bullish signals on the charts.
One key driver behind the rebound is the bullish divergence between the relative strength index (RSI) and BTC price on shorter timeframes. This technical pattern occurs when price registers lower lows while the RSI forms higher lows, often indicating waning bearish momentum and potential for a reversal.
The recovery also coincided with Bitcoin retesting its daily order block, providing a technical base for a possible push toward $115,000. However, traders note that stronger confirmation is needed before declaring a clear trend change.
According to market analysts, a four-hour candle close above $113,400 would signal a clear shift from bearish to bullish structure. Reclaiming the 200-period exponential moving average on the four-hour chart would further reinforce positive momentum.
The recent price action follows a sharp sell-off earlier in the week that saw Bitcoin fall nearly 3% as roughly $1.5 billion of crypto positions were liquidated in a single day. This wipeout, described as the biggest since March, triggered forced selling across derivatives markets, leading to sharp losses on Ethereum and other altcoins.
Large Bitcoin holders have been trimming their positions in recent weeks. Data shows whale entities holding 1,000 BTC or more have sold off approximately 147,000 BTC since Bitcoin’s all-time high above $124,500 in August.
This 2.7% reduction in holdings highlights sustained selling pressure from large investors, often interpreted as a headwind for price recovery. However, the broader market environment remains unusually quiet rather than decisively bearish.
Bitcoin’s implied volatility has dropped to its lowest levels since October 2023, a period that preceded a 325% rally from $29,000 to $124,000. Some analysts describe the current setup as a potential “quiet before the storm,” where low volatility and muted trader positioning may be storing momentum for a decisive move.
Supporting this view, data shows exchange reserves hovering at multi-year lows, leaving fewer coins available for selling. Meanwhile, Bitcoin’s Market Value to Realized Value (MVRV) ratio sits near the neutral zone, implying limited pressure for either panic-selling or aggressive profit-taking.
The recent market movements in Bitcoin and other cryptocurrencies appear closely tied to Federal Reserve policy decisions and outlook. The sell-off came just days after Bitcoin had initially rallied on the Fed’s quarter-point rate cut last week, the first easing in months.
That optimism proved short-lived, with risk appetite reversing due to the Fed’s cautious approach to future policy. In a recent speech, Fed Chair Jerome Powell said the central bank must tread carefully in weighing further reductions to borrowing costs.
Powell acknowledged that a softer labor market could allow more easing but warned that cutting too aggressively risked undermining progress on inflation. Traders are now focusing on Friday’s release of the U.S. personal consumption expenditures (PCE) index, the Fed’s preferred inflation gauge.
As of the latest trading data, Bitcoin hovers around $113,240, near its lowest level in two weeks. Most altcoins also remained rangebound after sharp losses at the start of the week, with Ethereum trading marginally down at $4,181.14, its lowest level in more than a month.
In related news, stablecoin issuer Tether is reportedly in early talks to raise $15-20 billion via a private placement that could value the company at about $500 billion. Tether CEO Paolo Ardoino confirmed on Wednesday that the company is evaluating a capital raise from a group of high-profile investors.
The world’s largest cryptocurrency continues to trade cautiously as market participants digest Fed comments and await critical economic data that could influence the direction of interest rates and, consequently, risk assets like Bitcoin.
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