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NewsBTC 2025-01-18 03:30:16

Why Bitcoin’s Ongoing Recovery Could Be Just the Beginning Of a Larger Rally

Bitcoin (BTC) has shown notable recovery since this week began, climbing back above $100,000 and now trading at $104,430. This upward move represents a 4.9% daily gain and more than a 10% increase over the past week. Analysts have been examining this rally closely, noting that it mirrors patterns observed in past market cycles. Specifically, the role of market pullbacks—often seen as discouraging by short-term investors—has emerged as a critical factor behind Bitcoin’s long-term strength. Related Reading: Is Bitcoin’s Upward Cycle Back? Key Insights Into The Latest Recovery Bitcoin Larger Rally Ahead, Here’s Why According to datascope, a contributor to CryptoQuant’s QuickTake platform, Bitcoin’s most significant rallies have frequently originated in so-called “bear zones.” These are periods when the market dips sharply, and sentiment turns pessimistic. However, the analyst emphasizes that these pullbacks are more than just periods of loss; they are times when patient investors can position themselves for future gains. The current recovery, as the analyst explains, aligns with a historical pattern where Bitcoin tends to emerge stronger after periods of sharp declines. Datascope wrote in a post on the CryptoQuant QuickTkake platform: When we look at Bitcoin’s pullbacks, a fascinating pattern emerges! What happens in those red-marked zones? The market takes a dive into the “bear zone,” and it feels like all hope is lost. But this is exactly where the magic begins!. By examining past performance, datascope found that Bitcoin’s strongest upward moves have historically followed these bearish periods. Rather than panic-selling, holding steady during these moments has proven advantageous for those looking to capitalize on the eventual market rebound. According to the analyst, “these patterns highlight the importance of market psychology and the power of patience.” Datascope concluded by noting: The takeaway is simple: if you can read Bitcoin’s ups and downs, pullbacks don’t have to be scary—they can be opportunities. While red zones might initially seem discouraging, history proves that the rebounds from these levels are often far more impressive. Patience wins! Coinbase Premium Index Signals Bullish U.S. Sentiment Meanwhile, another reason why Bitcoin’s ongoing recovery could lead to a larger rally is the fact that Coinbase Premium Index (CPI), has returned to positive territory for the first time since early January. This metric reflects the difference between Bitcoin’s prices on Coinbase and other exchanges, often seen as a gauge of US investor sentiment. The recent move into positive territory suggests that American buyers are reclaiming market influence, potentially driving Bitcoin’s recent gains. Related Reading: Crypto Fear And Greed Index Barrels Toward Extreme Greed Again As Bitcoin Price Clears $101,000, Is This Good News? Burak Kesmeci, another contributor to CryptoQuant, observed that US investors are showing renewed interest in Bitcoin as the inauguration of the new administration approaches. Kesmeci noted that the positive CPI readings indicate a market dominated by buyers on both daily and hourly timeframes. This shift in sentiment comes as Bitcoin reclaims the $100,000 milestone and may signal a broader trend of optimism among US investors. Featured image created with DALL-E, Chart from TradingView

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