Crypto market sentiment remains fragile; even with the positive news of the "U.S. government shutdown" ending, Bitcoin has not seen a decent rebound.

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After experiencing a massive crash that wiped out hundreds of billions of dollars in market value last month, Bitcoin is struggling to rebound, but fragile market sentiment and ongoing selling pressure are making any recovery attempts extremely difficult.

Although the positive news from Washington of averting a government shutdown boosted traditional risk assets, the cryptocurrency market did not see the strong rally that was expected, highlighting the ongoing unease and anxiety among investors after heavy losses.

On Monday, the world’s largest cryptocurrency briefly broke above $107,000, but quickly fell back below $105,000. This lackluster price performance contrasts sharply with the rising stock and credit markets following the U.S. government's reopening, indicating that internal momentum for crypto assets remains insufficient.

According to Bloomberg, since the record-setting liquidation triggered by Trump’s unexpected tariff announcement on October 10, Bitcoin’s market value has shrunk by about $340 billion. The prevailing view in the market is that the recent slump is partly due to early large holders (“OG whales”) cashing out near yearly highs, while the shadow of the large-scale liquidation in early October still lingers.

Signs of weakness are evident across several key indicators. Measures of market sentiment and leverage show that investor enthusiasm is far from recovered. At the same time, key resistance levels in technical charts are strongly suppressing prices, and market participants remain divided over the outlook.

Key indicators show lack of momentum

A range of data indicates that the momentum driving Bitcoin higher has yet to return. The total open interest in Bitcoin perpetual futures is currently around $68 billion, well below last month’s peak of $94 billion, reflecting a significant cooling of speculative interest in the derivatives market. Meanwhile, the funding rate, which measures the cost of leveraged positions, has remained flat, indicating that traders are not actively adding leveraged long bets.

More notably, spot Bitcoin ETFs, a major source of new capital for the market, have also been underwhelming. According to data compiled by Bloomberg, despite a broad rally on Monday in the U.S. stock market, U.S.-listed Bitcoin ETFs recorded only $1 million in net inflows that day. George Mandres, senior trader at XBTO Trading, pointed out that insufficient new capital represented by ETF inflows is continuing to impact risk sentiment in the market.

Formidable technical resistance

From a technical perspective, Bitcoin is also facing challenges. Its price is still trading below the 200-day moving average (now near $110,000), and analysts generally see this level as a key threshold for any sustained uptrend.

Tony Sycamore, analyst at IG Australia, said the price needs to hold above the 200-day moving average to “greatly increase confidence that the (uptrend has resumed).” FxPro chief market analyst Alex Kuptsikevich also observed that the broader cryptocurrency market cap is facing technical resistance at the 50-day moving average near $3.62 trillion. He believes the market may be forming a new, lower local high, continuing the downtrend that began over a month ago.

BTC Markets analyst Rachael Lucas added that $103,000 is a key structural support level. If that level is broken, it could open the way for prices to fall towards $86,000 or even deeper to $82,000 (in line with the 100-week moving average). Any move below these areas could rekindle selling pressure.

Diverging market views: Dead cat bounce or trend reversal?

Market participants are clearly divided in their interpretation of Monday’s brief rally. Some see it as a temporary pause in the bear market, while others search for early signs of a trend reversal.

George Mandres bluntly stated that this rebound “feels like a dead cat bounce.” He believes that sentiment in crypto remains different from the stock markets, and that reports of early Bitcoin buyers selling large amounts of tokens are drawing a lot of attention, with this supply pressure suppressing risk appetite. Alex Kuptsikevich also said the market is clearly not ready to return to a “wildly optimistic mode,” and that profit-taking is still ongoing after bursts of upward momentum.

However, some analysts are relatively positive. Tony Sycamore said the most notable feature in the past 24 hours was that, after last month’s decoupling, Bitcoin briefly tracked the rally in risk assets. He calls this a “positive signal”, and his technical analysis suggests the correction from the $126,272 high may have ended at the recent $98,898 low.

Rachael Lucas described the recent upswing as a “classic short-covering rally, mixed with some institutional FOMO (fear of missing out).” This view implies that the current rise is more driven by structural factors in the market, rather than a solid return of fundamental confidence.

Risk warning and disclaimerThe market carries risks, and investment should be cautious. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation, or needs of any individual user. Users should consider whether any opinions, views or conclusions in this article suit their particular circumstances. You are responsible for your own investment decisions based on this information. ```