Bitcoin Recovers but Headwinds Remain: What the Market Is Really Telling Us

Market shows signs of recovery — but don’t let it fool you

Bitcoin briefly climbed back to the US$81,000 level on Monday before settling near US$79,000. Meanwhile, Ethereum remained under pressure, trading below US$1,550 after its steepest weekly drop since October 2023. The market’s modest rebound may look encouraging on the surface, but I don’t think this is a signal of real optimism—at least not yet.

Fear still dominates sentiment. Over US$97 million in positions were liquidated within 24 hours, most of which were long bets. At the same time, Bitcoin’s open interest declined even as prices ticked up—a classic sign of short covering rather than genuine bullish momentum.

Capital rotation points to investor caution

One trend I’m closely watching is the continued rotation of capital into Bitcoin from altcoins. BTC dominance has risen to 62.7%, its highest since January 2021. This isn’t a sign of altcoin confidence—it reflects risk aversion. When markets turn shaky, capital always flows to perceived “safer” assets. In crypto, that’s Bitcoin.

We’re also seeing hesitation from whales. Key Bitcoin accumulators paused their purchases last week, and even Ethereum whales are sitting on large unrealized losses, with the next pressure point for ETH estimated at around US$1,290, according to CryptoQuant.

Tariff confusion keeps both crypto and equities on edge

Monday’s turbulence wasn’t limited to crypto. Equities also suffered after media reports hinted at a potential 90-day tariff freeze by the Trump administration—only to be quickly denied by the White House. That whiplash sent markets swinging, and the lack of policy clarity remains a major overhang.

Personally, I see this as a sign of how tightly capital markets are tethered to geopolitical signals. When trade policy becomes a moving target, both risk assets like crypto and traditional equities are bound to stay volatile. It’s hard to see a sustainable bull run under such conditions.

Short-term bounce, long-term questions

Yes, the crypto market saw a modest recovery. But given the lingering macro pressure, especially uncertainty around global trade dynamics, I believe this rebound is more technical than fundamental.

That said, what’s interesting is the uptick in diplomatic gestures—over 50 countries reportedly reaching out to the US for trade talks. If this turns into actual negotiation and de-escalation, the broader market tone could shift more decisively. But for now, I remain cautious.

What do you think: is this just a dead-cat bounce—or the start of something more durable? Always curious to hear your take.