When Everyone Is Bearish… Is It Time for a Contrarian Bitcoin Buy?

▲ Bitcoin (BTC)

After plunging more than 50%, Bitcoin (BTC) has entered a consolidation phase within the $66,000–$70,000 range, with some analysts suggesting that the current extreme bearish sentiment could actually signal a short-term rebound.

According to investment-focused media outlet FXStreet on February 19 (local time), Bitcoin has been trading within a narrow band between $66,000 and $70,000 in recent weeks. Although overall market sentiment remains deeply subdued, Gareth Soloway presented a short-term bullish scenario based on chart structure and derivatives market data.

He highlighted a significant concentration of put option open interest at the $40,000 strike price as the most notable signal. This indicates that market participants are heavily betting on further downside, which, from a contrarian perspective, can be interpreted as a bullish signal. Unlike last October’s peak warning, extreme pessimism—such as claims that “Bitcoin is going to zero”—is now spreading, suggesting that excessive fear could lay the groundwork for a rebound.

Technically, short-term trends are also somewhat favorable. While the broader macro trend remains bearish, short-term charts are forming what is known as an “in-spirit-of bull flag” pattern. This bullish formation remains valid as long as the $60,000 support level holds. If $60,000 breaks, the bullish scenario would be invalidated, with a potential downside risk of around 10%. However, a drop below $66,000 would somewhat weaken the reliability of the pattern.

Specific strategies were also suggested. An aggressive approach involves buying near $66,500 with a target range of $80,000–$85,000, offering a potential upside of approximately 23% to 30%. A more conservative strategy would be to enter after confirming a breakout above $70,000, targeting a 15% to 22% gain.

Ultimately, the key issue is whether the $60,000 level can hold. With the majority of the market leaning bearish, a sustained defense of support coupled with a breakout signal could open the door to a short-term momentum reversal.

Disclaimer: This article is for investment reference purposes only and the publisher is not responsible for any investment losses incurred based on this information. The content should be interpreted for informational purposes only.