Bitcoin Transitioning from Bear to Bull? In-Depth Analysis of Market Reversal

The Bitcoin market has recently experienced notable fluctuations, with the current price around $87,680, down 1.93% in the past 24 hours. Is this the beginning of a shift from a downtrend to an uptrend? Or just a temporary correction within a long-term recovery? To answer these questions, we need to delve into technical analysis and actual trading data.

Confirmation from Last Week’s Trading Signals

Last week (12/01 - 18/01), trading strategies based on quantitative model systems showed remarkable results. A short position was executed when BTC approached the significant resistance zone of $94,500 - $95,000, with confirmation signals from the price divergence trading model. Although this trade ended with a loss of 1.07% (without leverage), it confirmed the accuracy of the key points identified beforehand.

More importantly, the price successfully broke through the resistance threshold of $94,500 - $95,000 and reached a high of $97,963 — just 0.5% below the forecasted pressure zone of $97,500. This is clear evidence of the ability to assess critical market points.

Multi-Dimensional Technical Analysis — Signals of a Transition

Looking at the weekly chart of Bitcoin, three main analysis models present a complex picture of the market situation:

Momentum Quantitative Model shows the momentum lines gradually converging, with negative energy bars continuing to narrow. However, current signals are not sufficient to confirm a complete trend reversal. The reversal forecast indicator remains high, so caution is advised for potential oscillating corrections.

Sentiment Quantitative Model indicates a neutral state, with the blue sentiment line at 57.17 (intensity 0) and the yellow sentiment line at 25.28 (intensity 0). This suggests that market pressure and support are currently balanced.

Number Monitoring Model reveals an important signal: the price has been below the buy/sell division line for 9 consecutive weeks. Last week, the buying side attacked this line, with the weekly candle closing near below this division — an average bullish candle (around 2.92%). This hints at a potential shift in market strength balance.

On the daily level, the momentum model shows last week experienced “rise first, then fall” volatility. In the first half, the price accelerated recovery with the momentum line crossing above zero and positive energy bars expanding. However, in the second half, the energy bars narrowed significantly, and the momentum line trended back toward zero — a sign that buying momentum is beginning to weaken.

Key Price Zones Defining Future Market Movements

To understand Bitcoin’s potential transition, focus on strategic price zones:

Most critical resistance zone around $94,500 - $95,000 (at the upper edge of the previous trading range). If the price can hold this zone and establish support, it will be a strong signal of a genuine shift from downtrend to uptrend.

Second pressure zone at $97,500 - $99,500 (center of the previous trading range). Surpassing this zone could open the door to higher targets.

Main pressure zone near $102,000 — close to the 21-week moving average, a key long-term buy/sell boundary.

Important support zone at $89,500 - $91,000 (dense accumulation trading area). This is a critical area to monitor if the price is pulled down.

Second support zone around $86,000 - $86,500, and finally the basic support zone at $84,000 (lower edge of the previous trading range).

Trading Strategy and Key Considerations

Based on current analysis, trading strategies for the coming days should focus on the gains/losses around the $94,500 - $95,000 zone. This will be a decisive point:

• If the price confirms pressure at this zone, expect the market to oscillate within $84,000 - $94,500, with the next target being the $89,500 - $91,000 zone.

• If the price holds strongly above $94,500 - $95,000, a rebound within a range is likely, though gains will be limited until higher resistance zones are conquered.

Risk management remains a top priority. Stop-loss points for any position should be set at least 1.5% above entry price, and position liquidation should be done gradually as the price approaches support or resistance zones with confirmed signals.

Is Bitcoin Truly Transitioning from Bear to Bull?

The biggest question now is whether Bitcoin is in a genuine transition from a downtrend to an uptrend, or just a temporary recovery. Current data presents a mixed picture:

Positive signs include: breaking through key resistance zones, daily momentum recovery, and buying pressure attacking the main buy/sell division line. Divergence signals suggest potential change.

Warning signs include: on the weekly chart, the reversal signal is not fully confirmed, negative energy bars still influence, and daily momentum is beginning to weaken. Oscillating corrections remain a non-negligible risk.

Final Assessment

To answer whether history might repeat itself: Bitcoin stands at a crossroads. This week will be pivotal — a rebound or further correction depends on holding the $94,500 - $95,000 zone. Traders should focus on confirmation signals from multi-dimensional models before determining the market’s true direction.

The current price of $87,680 has decreased by 1.93% in 24 hours, indicating continued volatility. However, Bitcoin’s history shows that such transitional phases often repeat, creating opportunities for patient and disciplined traders. The key is to adhere to risk discipline and not be swayed by preliminary signals at the expense of rational judgment.