Written by Frode Skar, Finance Journalist.
Bitcoin rebound stalls near 71,000 dollars as market fear reaches 2022 levels
Bitcoin momentum fades around 71,000 dollars amid extreme risk aversion
Bitcoin’s rebound from last week’s sharp selloff has run into heavy resistance near the 71,000 dollar level, prompting traders to reassess the move as a classic bear market relief rally rather than the start of a renewed uptrend. Price action has slowed markedly after the initial bounce, reinforcing concerns that the broader market structure remains fragile.
The stall comes as sentiment indicators sink to their most fearful readings since the 2022 crypto downturn, while trading activity continues to thin across major exchanges. Together, these factors point to a market still dominated by risk aversion, weak conviction and limited liquidity.
Relief rally loses steam after capitulation style drop
Bitcoin briefly slid into the low 60,000 dollar range last week in a move that bore the hallmarks of capitulation. Forced selling, rapid liquidations and sharp intraday swings drove prices lower before buyers stepped in aggressively over the weekend.
That rebound carried bitcoin back toward the psychologically important 70,000 dollar level. However, follow through buying proved limited, and momentum quickly faded. Without sustained volume, the recovery struggled to extend beyond initial resistance.
This pattern is familiar to seasoned market participants. In bear market conditions, sharp rebounds often attract dip buyers, only for prices to encounter heavy selling from investors seeking to exit positions at improved levels.
Overhead supply caps bitcoin upside
Analysts point to substantial overhead supply as a key reason why bitcoin has struggled to push higher. Many investors who bought at elevated prices during the prior bull phase appear eager to sell into strength, creating persistent pressure near resistance zones.
The area around 71,000 dollars has emerged as a focal point for this dynamic. Each attempt to move higher has been met by renewed selling, preventing a clean breakout and reinforcing the perception that the broader downtrend remains intact.
Risk of renewed test of long term support
Several market observers warn that bitcoin could be vulnerable to another test of critical long term support. In particular, attention is focused on the region around the 200 week moving average, which aligns closely with the 60,000 dollar area.
In a market characterized by thin liquidity and fragile confidence, even moderate selling can trigger a cascade of stop losses and forced liquidations. This feedback loop can accelerate declines without the need for a single negative headline.
Sentiment sinks to extremes not seen since 2022
Sentiment indicators underscore the unease. The Crypto Fear and Greed Index fell to a reading of 6 over the weekend, matching levels last seen during the FTX driven collapse in 2022. Although the index has since rebounded modestly, it remains deep in extreme fear territory.
Such readings suggest that market participants lack conviction and are reluctant to take on new risk. Historically, extreme fear can coincide with major bottoms, but it can also persist for extended periods during prolonged downturns.
Thin liquidity amplifies price swings
Liquidity conditions are further complicating the picture. Order books on major exchanges have thinned significantly, making bitcoin more sensitive to relatively small flows of buying or selling.
In this environment, modest sell pressure can produce outsized price moves, which in turn trigger additional stop outs and liquidations. The result is volatile and often disorderly price action, even in the absence of major news.
Trading volumes continue to contract
Data from market analytics firms show a clear decline in trading activity since late 2025. Aggregate spot trading volumes across major centralized exchanges are down by roughly 30 percent, with monthly volumes falling from around 1 trillion dollars to closer to 700 billion dollars.
While last week saw brief spikes in activity during periods of sharp price movement, the broader trend remains one of declining participation. This reduction in volume reflects a market that is gradually losing engagement rather than experiencing a single, dramatic washout.
Retail participation quietly fades
Unlike past capitulation events marked by panic driven selling, current conditions suggest a slower withdrawal by retail investors. Many appear to be stepping away from the market altogether, rather than being forced out through rapid liquidations.
This gradual exit can lead to extended periods of weak price performance, punctuated by multiple failed rallies, rather than a clear capitulation low followed by a sustained recovery.
Part of a broader cyclical correction
Analysts also frame the current price action within bitcoin’s longer term cycle dynamics. The asset peaked near 126,000 dollars in late 2025 and early 2026 before entering a sharp correction. The move into the 60,000 to 70,000 dollar range represents a drawdown of more than 50 percent from the highs.
Historically, such cycle lows often take months to form and are characterized by repeated rallies that fail to gain traction. This process can test investor patience and further erode participation.
The 60,000 dollar level remains critical
In the near term, the 60,000 dollar area is widely viewed as the key battleground. As long as buyers continue to defend this level, bitcoin may settle into a volatile consolidation phase.
If that support fails, however, the same thin liquidity and risk off dynamics that fueled the recent selloff could quickly reassert themselves, particularly if broader macro conditions remain unfavorable for risk assets.
An uncertain path forward for bitcoin
Bitcoin now sits at a crossroads defined by heavy resistance, extreme fear and declining market participation. The recent rebound has yet to alter the broader technical and structural picture, leaving the market exposed to renewed downside risk.
For investors, the environment remains challenging. Sharp swings are likely to persist, while the absence of a clear capitulation signal makes it difficult to assess whether a durable bottom has been established.
