Despite Record Monthly Drop, Bitcoin Hid Signals of a 1,000% Rebound After the Crash

▲ Bitcoin (BTC)

Bitcoin (BTC) is plunging investors into despair after posting a record-breaking monthly decline. However, historical indicators suggest that an unprecedented rebound may be imminent.

According to Cointelegraph on Feb. 20 (local time), Bitcoin recorded historic losses over the past month, once again demonstrating the volatility of the digital asset market. Although Bitcoin logged its worst monthly decline on record within a certain range, severely dampening investor sentiment, analysts argue that such an extreme oversold phase could instead serve as a foundation for a powerful trend reversal.

An analysis of past data reveals that previous instances of record monthly declines have consistently aligned with market bottoms. During the 2018 bear market and again in 2022, when prices collapsed and doubts about Bitcoin’s survival emerged, the cryptocurrency invariably staged sharp V-shaped recoveries, reaffirming its asset value. Experts diagnose that the current selling pressure, coupled with miner capitulation, is undergoing a cleansing process that fully removes excess froth from the market.

On-chain analytics firm Santiment emphasized that Bitcoin’s market sentiment index has fallen to an all-time low, describing it as a classic bottoming signal. As the market-value-to-realized-value (MVRV) ratio enters a historically low zone, movements to secure undervalued supply relative to intrinsic value are being detected. Notably, buying pressure defending specific price levels even amid the downturn is reinforcing downside resilience, an encouraging sign for the market.

The actions of institutional investors stand in stark contrast to those of retail participants. Major holders such as Strategy are steadily increasing their Bitcoin positions, using the price decline as a buying opportunity and demonstrating strong conviction in long-term value appreciation. While retail investors exit the market in fear, institutions are engaged in a strategic race to accumulate supply ahead of a potential future shortage.

Bitcoin now stands at a crossroads between technical stagnation and a historic rebound, and its record monthly loss may prove to be the final pain before a massive rally. The market is compressing energy as it awaits a catalyst to break the downtrend and surge higher, and investors are urged to trust historical repetition rather than be shaken by volatility. Global attention is focused on whether Bitcoin will once again reclaim its role as a leading force in capital markets at the point where its record-breaking decline comes to an end.

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