The current round of the cryptocurrency market is clearly in a stage of diminished reaction. The announcement of a ceasefire, rising expectations of inflationary pressure, and the growing anticipation of a change in the Federal Reserve chairman should have led to more pronounced market fluctuations, but Bitcoin's overall response remains relatively limited. Although the price bounced back from $66,400 to $70,900, an increase of about 6.5%, trading volume and market participation have not expanded accordingly, indicating a lack of market momentum. Meanwhile, the cumulative losses in the cryptocurrency market remain significant, and the willingness to re-enter the market is weak, leaving the overall market in a wait-and-see phase for validation.

Weak rebound momentum: Easing news fails to drive significant fund inflow

From the market performance perspective, the ceasefire news provided some short-term breathing space but did not alter the overall weak pattern. The trading volume on the day the ceasefire announcement was made was about $121 billion, less than one-third of last October’s peak of $394 billion. Considering the current total market capitalization of the cryptocurrency market is approximately $2.42 trillion, this trading level does not reflect a strong willingness to enter the market.

At the same time, the cryptocurrency asset portfolio has retreated 43% from last October's high, corresponding to a loss of about $1.86 trillion. In contrast, traditional markets have seen limited pullbacks, and the losses in the cryptocurrency market still need time to digest. Against this backdrop, the market has not rapidly restored its risk appetite due to the easing of geopolitical news, reflecting that funds remain cautious regarding the current situation.

Technical indicators show signs of recovery: but macro constraints still limit trend reversal

From a technical perspective, Bitcoin has entered a clearly oversold zone, with some indicators beginning to show marginal recovery. The weekly stochastic indicator is approaching the critical threshold of 20%, and the monthly RSI is also beginning to show signs of bottom formation, indicating that market momentum may be changing.

However, similar oversold conditions persisted for several months in 2022, during which there were brief rebound signals, but they ultimately did not lead to an effective reversal. Therefore, the current improvement in technical indicators is still not sufficient as a standalone basis for a trend reversal. On the other hand, the market generally expects U.S. inflation to rise from 2.4% to 3.4%; if the data falls within the expected range, the Federal Reserve is likely to maintain its current stance; additionally, high oil prices and the transmission of energy costs to consumers may continue to suppress risk appetite for high-volatility assets.

Overall, the market remains in a cautious bearish phase. Though technical indicators have shown some signs of recovery, the fundamental logic also provides support for Bitcoin, but large-scale losses have not been fully digested, and fund inflows remain slow, with macro and geopolitical uncertainties still present. In this context, $70,000 has become a critical dividing line. If Bitcoin can effectively hold this level by the end of April, the market may shift from downward risks to upward potential; before that, waiting is preferable to prematurely betting on a reversal.

The above views are partly sourced from BIT on Target, Contact us to obtain the complete report of BIT on Target.

Disclaimer: There are risks in the market, and investment should be cautious. This article does not constitute investment advice. Trading in digital assets may carry substantial risks and instability. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT does not take responsibility for any investment decisions based on the information provided in this content.

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