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Bitcoin is trading in a compressed recovery structure similar to an ascending triangle, hovering around the high-$70,000 range. Although the price has established a series of higher lows, it is still having difficulty breaking through resistance in the $78,000-$80,000 range. According to the CryptoQuant CEO, the market could be nearing the bottom.
Short orders dominate
Positioning stands out. According to data, a sizable percentage of traders are leaning short, and major exchange long/short ratios continue to be skewed toward bearish bets. This concentration of short positions often produces asymmetry. The market is susceptible to a squeeze if prices move marginally higher than expected when too many players anticipate declines.
However, derivatives data shows mixed flows. Liquidation metrics indicate a consistent clearing of both long and short positions, but short-term inflows and outflows are erratic. This setting typically denotes indecision, but once a direction is selected, it also creates the conditions for more precise movements.
Bears might get overwhelmed
The bottoming argument uses a different perspective. Historically, when sentiment is low and risk-adjusted returns, like the Sharpe ratio, seem undesirable, Bitcoin tends to approach local bottoms. During those stages, the majority of market players find the asset to be structurally unappealing, which temporarily lowers demand but also prevents more aggressive selling.
The current situation fits that pattern to some extent. The price is not falling, but the level of enthusiasm is low. The market is not demonstrating strong conviction in either direction, and volume has stabilized rather than increased. This results in a situation where downside follow-through becomes less reliable when combined with the accumulation of short exposure.
The implication for investors is shifting risk rather than instant gains. In the near future, Bitcoin might keep consolidating and possibly return to support at $73,000. However, the likelihood of a move against the majority rises as short positioning grows and volatility decreases. The market does not appear robust, but it also does not act as though it is preparing to lose another leg. This distinction allows the bottoming thesis to take hold.
Dan Burgin
U.Today Editorial Team
