Bitcoin Rebound 1.16% After Trump-Musk Fallout

Bitcoin (BTC) prices experienced a significant dip below $101,000 on Thursday, following a fallout between US President Donald Trump and Elon Musk, which impacted the US financial markets. However, within the past 48 hours, Bitcoin has shown a rebound, climbing above $105,000 before stabilizing into a sideways movement. This price action has sparked discussions among analysts about whether this rebound is a healthy pullback or the start of a deeper correction.

KillaXBT, a popular crypto analyst, provided a detailed technical analysis of the Bitcoin market, discussing the recent price rebound and potential future developments. After reaching a new all-time high near $112,000 on May 22, Bitcoin entered a corrective phase, falling by an estimated 10% into the $100,000 price range before its recent rebound. KillaXBT attributed this rebound to a combination of technical and market factors, including daily FVG and volume imbalances, which are price-filled inefficiencies left on the chart.

Additionally, a liquidity sweep occurred as Bitcoin's steady decline pushed prices below the previous weekly lows, triggering many stop-losses from long positions. This created a flush of liquidity for big players, fueling the market rebound. KillaXBT also highlighted a short squeeze setup, where the Bitcoin market turned short heavy as traders expected further downside following the initial price bounce from $100,000. When prices started going up, these short traders had to buy back to cover their losses, adding more fuel to the rally.

Looking ahead, KillaXBT outlined three potential scenarios for Bitcoin. Currently, the premier cryptocurrency is retesting a resistance zone between $104,800-$106,000, which aligns with the 0.5-0.618 Fibonacci retracement levels of the recent price drop. The first scenario involves a bullish continuation if Bitcoin breaks and holds above this resistance region, potentially trapping short sellers and fueling further upside momentum. The second scenario involves a price decline and retest of the $100,000 support level if Bitcoin faces rejection at the specified resistance area. The third and worst-case scenario includes a price break below $100,000, leading Bitcoin to retest support zones around the $97,000 price region.

KillaXBT's personal projection expects market makers to continue driving Bitcoin's price higher, capitalizing on the recent sharp rebound that caught many short traders off guard. With no clear "safe" long entry yet available, the analyst suggests that pushing prices further would trap more short sellers while forcing sidelined bulls to chase the rally. At press time, Bitcoin continues to trade at $105,600, reflecting a 1.16% gain in the past day.