Is the Short-Term Rebound Over? Crypto Market Shaken by Profit-Taking Pressure

▲ Bitcoin (BTC), Dogecoin (DOGE), cryptocurrency decline / ChatGPT-generated image ©

The cryptocurrency market, which had cheered the recovery of the $70,000 level overnight, bowed its head again just one day later. Following the sharp rebound, a wave of profit-taking emerged, returning part of the gains.

As of 8:18 a.m. on the 16th, according to CoinMarketCap, the total cryptocurrency market capitalization stood at $2.351 trillion, down 2.25% from the previous day. Bitcoin (BTC) was trading at $68,916, down 1.46% over the past 24 hours, while Ethereum (ETH) plunged 5.83% to $1,968. XRP (Ripple) fell 1.00% over the same period to $1.48, and Dogecoin (DOGE) dropped 7.77% to $0.1027. Major altcoins that had posted strong rebounds the previous day appeared to be taking a breather in unison.

The previous day, the market staged a short-term surge as expectations of easing U.S. inflation revived risk appetite. However, as prices recovered rapidly in a short period, profit-taking by short-term traders was believed to have followed. Declines were particularly pronounced in assets like Ethereum and Dogecoin, which had recorded larger short-term gains. Technically, there were also concerns that the rebound following the sharp drop could prove to be nothing more than a so-called “dead cat bounce.”

The U.S. stock market being closed for the weekend also served as a variable. With difficulty in confirming spot ETF inflows or tracking correlation with equities, aggressive buying failed to materialize, highlighting selling pressure amid a vacuum in demand. The Fear & Greed Index remained at 13, indicating “Extreme Fear,” underscoring still-fragile investor sentiment.

The key question ahead is whether Bitcoin can defend the $68,000 level and attempt to reclaim $70,000 once again. If this level breaks, a short-term retest of the $65,000 range is being discussed. Conversely, if ETF flows turn back to net inflows and macroeconomic indicators act favorably for risk assets, there remains the possibility that the recent low could be confirmed as a short-term bottom.

Market participants advise that in this volatile environment of repeated sharp rises and falls, rather than chasing rallies, it is necessary to monitor key support levels and changes in trading volume. Whether the recent rebound develops into a trend reversal or proves to be another technical bounce will likely depend on fund flows and macro events this week.

*Disclaimer: This article is for investment reference purposes only and we are not responsible for any investment losses incurred based on it. The content should be interpreted for informational purposes only.*