Bitcoin is showing signs of recovery after long weeks of selling pressure that culminated in a sharp flash crash on October 10, when the price briefly fell to around $103,000. Since then, Bitcoin has rebounded modestly, and is now testing resistance near $111,000, an area where sellers have historically intervened. Despite the bounce, market sentiment remains fragile, with traders hesitant to identify a clear bottom.
According to senior analyst Darkvost, Bitcoin may be entering a new phase of disbelief – a phase often seen at the end of major corrections, when investors struggle to trust any sign of recovery. This shift has become increasingly evident in the derivatives market, particularly through funding rates, which reflect traders’ positioning and market bias.
On Binance, which still dominates global futures trading volume, funding rates have remained negative for six of the past seven days, currently standing around -0.004%. This persistent bearish bias indicates that short positions are still outperforming long positions, as traders remain cautious following the recent wave of liquidations. Historically, such sustained disbelief and brief domination often preceded strong short squeezes or relief marches.
Disbelief can set the stage for the next big rally
According to Darkfost, the current phase of disbelief could paradoxically become the basis for Bitcoin’s next big rally. When traders remain excessively bearish despite the early hour Signs From the recovery, the accumulation of short positions can create a setup for strong selling pressure. In such scenarios, even a modest upward movement can force short sellers to cover their positions, accelerating buying pressure and fueling a rapid price breakout.
If the current uptrend continues to build momentum, this wave of liquidations could push Bitcoin sharply higher. Darkfost points to key liquidity areas around $113,000 and $126,000, both areas where large short positions are currently concentrated. As these positions ease, Bitcoin could see a chain reaction of forced buying – a dynamic that has historically led to explosive moves.
Similar patterns have unfolded before. In September 2024, Bitcoin fell to $54,000 before rebounding above $100,000 for the first time, fueled by a widespread short squeeze. Again, in April 2025, Bitcoin rose from $85,000 to $111,000, and eventually to $123,000, following the same structure.
DarkFust suggests that the market could now enter another phase of disbelief, as widespread doubts mask underlying strength. If history holds true, this uncertainty-driven environment could once again turn fear into momentum — paving the way for Bitcoin’s next major move higher.
Bitcoin finds short-term support and eyes $113K resistance
Bitcoin is showing signs of stabilization after a volatile week, rebounding from a recent low near $106,000 to trade around $111,200. The chart shows BTC regaining momentum in the short-term, with buyers approaching the 200-day moving average (red line), a key long-term support area characterized by historically observed accumulation phases during corrections.
However, BTC now faces a major test ahead. The 50-day (blue) and 100-day (green) moving averages are converging near $114,000-$115,000, creating a dense resistance block. A successful break above this area would signal renewed strength and perhaps open the way towards $117,500, the next key liquidity area and psychological barrier for the bulls.
On the downside, failure to hold above $110,000 could expose Bitcoin to renewed selling pressure, perhaps retesting $106,000 or even the $103,000 level reached during the October 10 flash crash. The current structure indicates that the market is still in the recovery and disbelief phase, as traders remain cautious despite improving price action.
Right now, the main focus is on whether Bitcoin is able to maintain momentum above the 200-day moving average. A confirmed daily close above $113,000 would bolster bullish confidence and validate the start of a potential short-term reversal.
Featured image from ChatGPT, chart from TradingView.com
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