Bitcoin Dips 2% After $106,709 Sell-Off, Bullish Sentiment Returns

Bitcoin's price recently dipped after a strategic sell-off at $106,709, offering investors a 2% discount to re-enter the market. This sell-off was a calculated move to take profits before the dip, providing a renewed opportunity for those who may have acted too early. Market shifts often create fresh opportunities, and this is one of them.

With geopolitical tensions easing and the war phase cooling down, bearish pressure on Bitcoin is lifting. This shift in sentiment could mark the end of the bearish phase, hinting at a more sustained recovery. As the market sentiment shifts to bullish, approaching the market with a fresh bullish bias may yield solid returns.

Investors looking to re-enter the market post-bearish phase can employ several smart strategies. Dollar-Cost Averaging (DCA) is one such strategy, where investors buy small amounts over days or weeks to minimize timing risk and smooth costs. Setting limit orders to target a slightly lower entry point, 2–3% below current levels, can replicate the discount effect seen after the $106K sell-off. Additionally, staying alert for unexpected macro or geopolitical updates that could briefly reintroduce dips is crucial for adjusting strategies accordingly.

Bitcoin has shown resilience, recovering to trade above $101,000 despite concerns about a potential double top. On-chain data suggests that Bitcoin is in a healthy consolidation phase rather than at a market top. The 30-day moving average (MA) of Binary Coin Days Destroyed (CDD) indicates that long-term holders are continuing to hold onto their BTC, suggesting optimism about Bitcoin’s potential for further upside. The analyst noted that when Bitcoin’s Binary CDD exceeded 0.8, it was typically followed by a steep correction. However, this time, the indicator has peaked around 0.6 and is now on the decline, suggesting the market is far from overheating. The analyst emphasized that this indicator does not signal the end of the bull run. Rather, Bitcoin could be following a “staircase-like movement,” where periods of consolidation are followed by a strong upward leg. Historically, Bitcoin tends to rally when market attention fades and sentiment remains quiet. Therefore, the current period of low volatility could be a precursor to Bitcoin’s next major move to the upside.

While the current bearish sentiment may have raised hopes for further price pullback for the largest cryptocurrency by reported market cap, both technical and on-chain indicators suggest otherwise. For example, short positions have been rising sharply within the $100,000–$110,000 range, increasing the likelihood of a short squeeze, which could drive BTC to a new all-time high (ATH). However, some caution is warranted, as short-term holders have been selling during recent dips, showing a lack of confidence in Bitcoin’s ability to sustain its upward trajectory.