Bitcoin’s Bounce Might Not Last—More Pain Ahead?

​Bitcoin may have clawed its way back above $87,000 after dipping under $80,000 earlier this month, but analysts warn: the worst might not be over yet. The world’s largest cryptocurrency is still down 23% from its January high of $109,225, and the forces that triggered the plunge—tariff fears and policy uncertainty under Trump’s administration—haven’t gone anywhere.

The Fed Sparked a Brief Rally—But Risks Linger
Bitcoin briefly rebounded following the Federal Reserve’s decision to slow quantitative tightening, a move that signaled liquidity relief for risk assets. Traders cheered, options markets flipped more bullish, and call options began outpacing puts. But that optimism may be short-lived.

“Traders are reacting emotionally to short-term news,” said Shubh Varma of Hyblock Capital. “But the macro picture remains murky”.

Analysts See Possible Drop to $70,000
According to Greg Magadini at Amberdata, bitcoin could still fall to around $70,000 before finding a bottom. He warns that while the options market looks temporarily optimistic, put options may regain popularity if macro conditions deteriorate.

Trump’s unpredictable tariff policies are casting a long shadow over markets. “We still don’t know how these tariffs will affect global trade, inflation, or interest rates,” Magadini noted.

Bitcoin's Sentiment Score Is Flashing Red
Adding to the concern: CryptoQuant’s Bull Score Index, which tracks network activity and investor sentiment, just hit 20—its lowest since January 2023. The index needs to be above 60 to indicate strong bullish momentum. Below 40, it tends to signal continued bearish conditions.

Unless investor sentiment dramatically improves, the current rebound may just be a dead-cat bounce.

Uncertainty Is Bitcoin’s Worst Enemy
Sean Farrell of Fundstrat explains that crypto, more than any other asset class, thrives on momentum and confidence. But Trump’s unpredictable political moves are creating a whiplash environment that kills trends before they gain steam.

“One tweet, one tariff threat, and the entire market narrative flips,” Farrell said. In this environment, bitcoin becomes hyper-sensitive to headlines.

Bottom Line: Caution Ahead
Despite a recent bounce, bitcoin’s technical and fundamental signals suggest further downside is possible. If macro fears intensify and sentiment doesn’t recover, analysts say a drop back toward $70,000 is on the table.

For crypto investors hoping the worst is over—you might want to wait before popping the champagne.


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