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Bitcoin’s Resurgence: A Glimmer of Recovery Amidst Market Uncertainty
After experiencing a significant downturn, Bitcoin is showing signs of recovery. The digital currency recently plummeted during a flash crash on October 10, dipping to approximately $103,000. However, Bitcoin has since rebounded and is now testing resistance levels near $111,000, an area historically dominated by sellers. Despite this uptick, market sentiment remains fragile, with traders reluctant to declare a definitive bottom.
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Market Insights from Analyst Darkfost
Renowned analyst Darkfost suggests that Bitcoin might be entering a new phase known as “disbelief.” This stage often emerges at the tail end of significant corrections, when investors find it difficult to trust recovery signals. This sentiment is particularly evident in the derivatives market, as reflected by funding rates, which indicate trader positioning and market sentiment.
At Binance, the global leader in futures trading volume, funding rates have been negative for six out of the past seven days, currently hovering around -0.004%. This persistent bearish sentiment suggests a dominance of short positions over longs, as traders proceed with caution following the recent wave of liquidations. Historically, such sustained disbelief and short dominance have often foreshadowed strong short squeezes or relief rallies.
Potential for a Major Rally Catalyzed by Disbelief
Darkfost posits that the current phase of disbelief could paradoxically lay the groundwork for Bitcoin’s next major rally. When traders maintain a bearish outlook despite initial recovery signs, the accumulation of short positions can set the stage for a powerful short squeeze. In such scenarios, even a moderate upward movement can trigger short sellers to cover their positions, intensifying buying pressure and propelling a rapid price breakout.
If the current uptrend gains momentum, a wave of liquidations could drive Bitcoin significantly higher. Darkfost highlights key liquidity zones around $113,000 and $126,000 as critical areas where short positions are heavily concentrated. As these positions unwind, Bitcoin could experience a chain reaction of forced buying, a dynamic historically associated with explosive price movements.
Past patterns have shown similar behavior. In September 2024, Bitcoin declined to $54,000 before rebounding above $100,000, driven by a large-scale short squeeze. Again, in April 2025, BTC surged from $85,000 to $111,000, eventually reaching $123,000, following a similar trajectory. Darkfost suggests that the market might now be entering another disbelief phase, where widespread skepticism conceals underlying strength. If history repeats, this doubt-driven environment could once again transform fear into momentum, setting the stage for Bitcoin’s next significant move upwards.
Bitcoin’s Short-Term Prospects: Support and Resistance Levels
Bitcoin is demonstrating signs of stabilization after a turbulent week, recovering from its recent low near $106,000 to trade around $111,200. The chart indicates BTC regaining short-term momentum, with buyers stepping in near the 200-day moving average, a crucial long-term support zone historically associated with accumulation phases during corrections.
However, Bitcoin faces a challenging test ahead. The 50-day and 100-day moving averages are converging near $114,000–$115,000, creating a dense resistance cluster. A successful breakout above this region would indicate renewed strength and potentially pave the way toward $117,500, the next major liquidity area and a psychological barrier for bulls.
On the downside, a failure to maintain above $110,000 could expose Bitcoin to renewed selling pressure, potentially retesting the $106,000 or even the $103,000 level reached during the October 10 flash crash. The current structure suggests that the market is still in a recovery and disbelief phase, where traders remain cautious despite improving price action.
For now, the primary focus is on whether Bitcoin can sustain momentum above the 200-day moving average. A confirmed daily close above $113,000 would bolster bullish confidence and validate the onset of a potential short-term reversal.
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