[Analysis] "Bitcoin attempts a technical rebound after capitulation selling…trend reversal hinges on fresh inflows"

An analysis says Bitcoin (BTC) has been attempting a technical rebound after a recent bout of sharp selling. However, whether the bounce can develop into a trend reversal is seen as depending on whether new money flows into the market.

According to Bitcoin Sistemi, a crypto-focused outlet, on the 9th Matrixport said in a recent report that “during the latest decline, fragile positions were flushed out, triggering a chain reaction of passive spot selling and forced liquidations in derivatives markets.” The report characterized the move as a phase of “capitulation (capacitation).”

Matrixport said there is still room for a near-term technical rebound. But it noted that if this bounce is confined to short covering or institutional flows such as hedge funds, the durability of the upswing could be limited. The report stressed that “the key to a trend reversal is whether fresh capital enters the market.”

On the medium-term outlook, it maintained a cautious view. It assessed Bitcoin as being in a “recalibration” phase of a broad bearish cycle, explaining that while sharp rebound rallies may emerge in this process, they are generally difficult to sustain.

The analysis added that on-chain indicators also point to market fragility. According to the report, recent demand momentum has been weak and structural accumulation limited, while in the options market rising hedging demand has been accompanied by expanding volatility.

The report added that “if support in the spot market weakens, prices could fall quickly, and in that process the influence of derivatives markets on Bitcoin price formation could grow further.”