Bitcoin Gears Up for Rebound in Historically Extreme Oversold Zone as Investor Sentiment Turns Deeply Polarized

▲ Bitcoin (BTC)

Bitcoin (BTC) has reached a critical turning point for breaking out of its long-term trading range, as both buying demand recovers and technical indicators show signs of emerging from oversold conditions.

On February 26 (local time), cryptocurrency analyst Lark Davis said in a video posted on his YouTube channel, “Real buying demand for Bitcoin has reached its highest level since last November, and sellers in the market are being exhausted.” Davis noted that Google searches for how to buy Bitcoin have surged to a five-year high, signaling an explosive increase in market interest. However, searches driven by fear that Bitcoin could fall to zero have also risen simultaneously, highlighting deeply divided investor sentiment.

From a technical perspective, major assets including Bitcoin, Ethereum (ETH), Solana (SOL), and XRP are all testing resistance at the 20-day moving average while seeking direction. Bitcoin has recently formed a higher low pattern, and if a daily candle closes above the 20-day moving average, it is likely to enter a full-fledged uptrend. Davis advised that the prolonged sideways consolidation of recent weeks is nearing a resolution and that investors should closely monitor the timing of a technical breakout.

Stock indicators of Strategy, a company that has adopted a Bitcoin-focused strategy, further reinforce the possibility of a market rebound. Strategy is considered one of the most heavily shorted stocks globally, yet its weekly Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) have entered extremely oversold territory comparable to the 2022 bear market bottom. In particular, a bullish golden cross has been detected on the weekly MACD, creating conditions for a potential short squeeze, where investors betting on further declines are forced to buy back shares to cover their positions.

The overall liquidity environment in the market is also showing gradual improvement. According to analysis by Santiment, spot buying demand for Bitcoin is reviving, while sellable supply on exchanges is being depleted, creating a supply-demand imbalance that pressures prices upward. Davis explained that if there are no sellers left in the market, only buyers remain, and the resulting supply shortage strengthens downside price rigidity.

The digital asset market is currently consolidating energy to form a new trend after a prolonged period of price correction and sideways movement. As major technical indicators signal rebounds near historical lows, whether Bitcoin can break above $70,000 will be a key factor determining the short- to mid-term market direction. Market participants are maintaining a cautious stance, adjusting their level of engagement while awaiting confirmation of a decisive shift in the indicators.

Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses resulting from its use. The content should be interpreted solely for informational purposes.