Bitcoin Rebound, a Dead Cat Bounce? $53,000 Warning Issued

Bitcoin Rebound, Will It Be Just a Temporary Bounce? ...$53,000 Warning and $76,600 Reversal Scenario

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Bitcoin (BTC) rebounded from the $60,000 support line, but with sluggish spot demand continuing, warnings have emerged that this rally might be nothing more than a 'Dead Cat Bounce'. However, the possibility of an expanded rebound was also raised if the CLARITY Act, a U.S. cryptocurrency market structure bill, passes and whale investors continue their buying spree.

According to crypto media outlet Finbold on July 9 (local time), Bitcoin rebounded amid weakening influence of the 'Trump Always Chickens Out (TACO)' trading strategy, but the market remains wary of further declines. Over the past 30 days, Bitcoin has repeatedly fluctuated within a range centered around approximately $62,750, with a tug-of-war continuing between spot and derivatives investors. The outlet analyzed that a multi-month bearish market structure is still maintained, as a pattern of lower lows and lower highs has been confirmed since the beginning of the year.

The recent rebound from the $60,000 support level was driven by a recovery in futures market demand. According to CryptoQuant data, Bitcoin futures demand turned slightly positive from approximately -295,000 BTC. However, spot demand has remained weak over the past 30 days, leading the outlet to assess that this rebound cannot rule out the possibility of being a temporary dead cat bounce rather than a trend reversal.

Debate continues over whether the future downtrend has ended. Amid mixed capital flows for U.S. Bitcoin spot ETFs, Glassnode analyzed that long-term holders have sold an average of approximately $280 million worth of Bitcoin per day in recent days. This is the largest volume since December 2022. Furthermore, based on the fact that Bitcoin has traded below the average purchase price of active investors and the breakeven point of recent buyers for about five months, it predicted a potential drop to $53,000, the realized price, if demand from whale investors does not recover.

Conversely, an upside scenario was also presented. The outlet analyzed that if the CLARITY Act, a U.S. cryptocurrency market structure bill, passes in July and whale investors expand their Bitcoin accumulation, the market sentiment could reverse. In this case, Bitcoin could rise to $76,600, the 'True Market Mean,' and $72,200, the average purchase price for short-term holders, potentially invalidating bearish forecasts.

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