Bitcoin Recovers Above $87,000: Analysts See Opportunities for Sustainable Trend Reversal

Recovery After Turbulent Weeks

Bitcoin continues its recovery at the start of the new week, trading above $87,000 on Monday morning – a gain of around 1.5 percent compared to the previous day ^[1]. Ethereum is also gaining ground, trading above $2,800 ^[1]. The crypto markets are thus showing first signs of stabilization following the significant price decline of recent weeks.

Analysts at Swissblock explain that Bitcoin has "taken the first real step toward establishing a bottom" ^[2]. The risk-off signal is declining sharply, which signals two important developments: "Selling pressure has eased, and the worst of the capitulation is likely behind us – for now" ^[2].

Selling Pressure Eases

Particularly noteworthy is the massive decline in Bitcoin's open interest. Analyst "Darkfost" points to CryptoQuant data showing that open interest has recorded the "strongest 30-day decline of the cycle" – approximately 1.3 million BTC valued at $114 billion ^[3]. The last comparable decline occurred during the 2022 bear market ^[3].

"Historically, these cleanup phases have often been crucial for establishing a solid bottom and laying the foundation for a renewed bullish trend," explains Darkfost ^[3]. The deleveraging phase, in which excessively optimistic positions are closed, helps rebalance the market.

Decisive Week Ahead

Charles Edwards, founder of Capriole Fund, attributes the recent sell-off to fluctuating expectations regarding a U.S. Federal Reserve interest rate cut ^[2]. Tech stocks and crypto markets have come under pressure over the past two weeks "due to changing market expectations" ^[2]. The probability of a Fed rate cut in December has risen from around 30 percent last week to 70 percent again ^[2].

Michael van de Poppe, founder of MN Fund, describes the coming week as "crucial" for the Bitcoin price ^[3]. Should BTC return to the $90,000 to $96,000 region and hold there, "the chances of a recovery toward a new all-time high would increase significantly" ^[3]. Van de Poppe emphasizes: "Fear and panic were maximal in recent days. These are the best opportunities in the markets" ^[3].

Altcoins and Upcoming Events

The broader crypto market shows a mixed picture. While Canton Network leads with a gain of 13 percent and Hedera with plus 10 percent among the biggest winners, privacy coins such as Zcash, Dash, and Monero suffered losses between 5 and 9 percent ^[1].

Investors are also looking at several major events this week: In addition to the mainnet and token launch of Layer-1 blockchain Monad and the start of trading for Grayscale's Dogecoin and XRP ETFs, significant token unlocks at Hyperliquid, Jupiter, Zora, and Plasma are also scheduled ^[1].

Macroeconomic Factors in Focus

U.S. futures also showed a positive trend on Monday morning, with an increase of 0.5 percent for the S&P 500 and 0.7 percent for the Nasdaq 100 ^[1]. Following the end of the government shutdown, Wall Street expects an improved data foundation. Important economic data such as U.S. producer prices, retail sales, and core PCE inflation data could have significant influence on the Bitcoin price this week ^[1].