Despite Widespread 'Crash' Warnings, Can Bitcoin Reclaim $74,000 in a Contrarian Rally?

▲ Bitcoin (BTC), U.S. Dollar (USD) / ChatGPT-generated image

The cryptocurrency market is bracing for a potential massive crash. However, contrary to widespread expectations, analysts suggest that an exceptionally strong rebound rally may be imminent as historically extreme oversold indicators converge with optimism over regulatory developments.

Cryptocurrency analyst Lark Davis stated in a video published on his YouTube channel on February 16 (local time) that the market is preparing for what could become “the most hated rally.” He cited the recent surge in the S&P 500 put-call ratio to its highest level in a year as evidence. Historically, whenever market participants have made extreme bearish bets, short-term bottoms have formed. Considering this pattern, the likelihood of a surprise rebound driven by a short squeeze—buying pressure resulting from the liquidation or covering of short positions—appears significant.

Major positive developments capable of attracting institutional capital are also emerging. Brazil recently reintroduced a bill to purchase 1 million BTC as part of its national reserves, a move currently valued at approximately $69 billion. Meanwhile, as calls grow for U.S. President Donald Trump to adopt a national Bitcoin reserve strategy, a White House official reportedly indicated that if the CLARITY Act—legislation aimed at structuring the U.S. cryptocurrency market—passes, trillions of dollars in institutional capital stand ready to enter the market. Legal clarity under the Trump administration could fundamentally transform the industry’s structure.

Technical indicators further point to signs of a bottom for Bitcoin. BlackRock’s spot Bitcoin ETF, IBIT, recently recorded a peak in sell volume accompanied by record trading activity, while the Fear and Greed Index plunged to an all-time low of 5. Bitcoin has broken out of a falling wedge pattern and is currently positioned near the $69,000 level, where a potential short squeeze could unfold. A bullish crossover on the Moving Average Convergence Divergence (MACD) indicator supports expectations of a short-term relief rally toward the 20-day exponential moving average around $74,000.

The altcoin market is also eyeing rebound opportunities based on long-term support lines. Ethereum has maintained its multi-year trend support and has exited oversold territory. Despite heavy selling by large holders, strong support between $1,900 and $2,000 has been confirmed, opening the possibility of a recovery toward the $2,800 to $3,000 range. Major assets such as Solana and Pepe are also attempting to shift into bullish momentum, preparing to move in tandem with a Bitcoin rebound.

Rumors that X (formerly Twitter), led by Elon Musk, may support cryptocurrency trading, along with a surge in search volumes for artificial intelligence-related cryptocurrencies, highlight the market’s persistent growth potential. As long as Bitcoin firmly holds the 200-week exponential moving average around $68,000 on the weekly chart, the prevailing downtrend is expected to conclude soon. Although macroeconomic uncertainties remain, current price levels dominated by excessive fear are viewed as attractive accumulation zones from a long-term perspective.

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