Bitcoin Price Recovers 4% as Analysts Suggest Market Bottom May Have Been Reached

Bitcoin (BTC) experienced a significant rebound on March 11, rising back above $81,000, as US stocks futures sought a much-needed relief following a challenging trading session that had previously driven prices to new four-month lows.

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

BTC Price Recovery Amid Short Squeeze Speculation

According to data from Cointelegraph Markets Pro and TradingView, Bitcoin's price saw daily gains nearing 4%. The previous day brought fresh four-month lows in the face of recession fears, resulting in widespread selling among risk-asset investors.

The downward pressure was evident with the S&P 500 and Nasdaq Composite Index declining by 2.7% and 4%, respectively. However, at the time of this report, Nasdaq 100 futures had managed a recovery of about 0.4% from their lowest levels observed since September 2024.

In response to these fluctuating market conditions, the trading resource The Kobeissi Letter posed an intriguing question, asking if the markets were poised for a significant short squeeze. They highlighted that investor sentiment was in "extreme fear" territory, suggesting that a rally could be on the horizon, even for those forecasting a prolonged bear market.

Kobeissi and others noted concerning indicators such as elevated levels in the VIX volatility index, suggesting the potential for a more sustained recovery in the markets. Timothy Peterson, a financial analyst known for his Bitcoin price prediction models, stated that the current VIX levels are historically high, indicating an 89% probability that the recent lows could represent a market bottom.

VIX volatility index. Source: Timothy Peterson/X

Market Analysis and Future Outlook for Bitcoin

As Bitcoin moved upwards, it managed to find some relief after previously hitting $76,600 on Bitstamp.

Related: Biggest Red Weekly Candle Ever: 5 Things to Know in Bitcoin This Week

Trader Cas Abbe commented on the situation by referencing a bullish divergence on the 4-hour chart’s relative strength index (RSI). While he warned that this does not guarantee an overall market reversal, he noted that a short-term rally seemed imminent.

BTC/USD 4-hour chart with RSI data. Source: Case Abbe/X

Previously, trader Rekt Capital advised followers to keep an eye on similar RSI signals appearing on the daily chart for confirmation of a stronger BTC price recovery.

In a broader context, however, several prominent figures in the crypto market have expressed skepticism about Bitcoin's ability to reclaim its previous all-time highs. A trader using the pseudonym HTL-NL noted that the issues in the market aren't isolated to crypto, pointing to a general trend affecting all risk-off assets, likely due to broader economic challenges the US is facing.

BTC/USDT 1-day chart. Source: HTL-NL/X

S&P 500 futures 1-day chart. Source: HTL-NL/X

This article serves only for informational purposes and does not constitute investment advice or recommendations. Readers should conduct their research before making any investment decisions.

Bitcoin, Stocks, Market