Bull and bear standoff: The "disagreement code" at the $66,000 Bitcoin threshold

Last week, Bitcoin experienced a brief respite above $72,000 after a five-month-long consecutive monthly decline, only to fall back below $66,000. The market did not see a one-sided frenzy or collapse but instead fell into an unprecedented “disagreement.”

Some are watching the candlestick charts and shouting “trap,” predicting a double bottom down to $40,000; others hold onto on-chain data, firmly believing this is the last “golden opportunity” in the bull cycle. In this fierce battle over direction, emotional calls are gradually losing effectiveness, and cold quantitative indicators and technical charts have become the only “judges” for both bulls and bears.

1. Market “裂痕”: From Extreme Fear to Bull-Bear Confrontation

● Just days ago, the market was shrouded in record-breaking pessimism. Bitcoin experienced the longest consecutive monthly decline in history, with many speculating that a bear market had arrived. However, as prices quickly rebounded above $72,000 earlier this week, social media sentiment instantly shifted from “extreme fear” to heated debates over whether this is a rebound or a reversal.

● This divergence is vividly reflected in prediction markets. Data from decentralized prediction platform Polymarket shows that despite the rebound, many traders are betting that Bitcoin will hit new lows this year. Up to 75% of bets believe BTC will drop to $55,000, with a significant portion even considering a fall below $45,000 as possible.

● In stark contrast, spot Bitcoin ETFs, after months of outflows, suddenly recorded nearly $700 million in net inflows this week, as if institutional funds are quietly “bottom-fishing.”

● This “temperature difference” between retail pessimism and institutional entry forms the core contradiction in the current market. Ordinary investors worry this is a “bull trap” or “dead cat bounce,” risking sharper declines if they chase the rally; meanwhile, large-cap institutions seem to be leveraging this divergence to restructure their positions.

2. The “Key Player” of Technicals: RSI and Funding Rates’ Call

When the market direction is unclear, traders turn to technical indicators that have accurately predicted turning points in history.

● The first to send a strong signal is Bitcoin’s weekly Relative Strength Index (RSI). During the late February decline, this indicator fell to 26.84, entering a rare “deep oversold” zone. This value is not only the lowest in this cycle but also the third-lowest in Bitcoin trading history.

● Data analysis shows that during the previous two instances when RSI reached such lows, they corresponded to important market bottoms. For technical traders, this is like the market whispering: “Selling pressure may have exhausted.”

● Another key piece of evidence comes from derivatives market data—the funding rate of perpetual contracts. Recently, the 30-day average funding rate for Bitcoin perpetual contracts turned negative for the 10th time since 2018. This indicates that short positions dominate the market and that longs are paying fees.

● Historically, extreme pessimism often signals a good contrarian buy opportunity. K33’s research reports that after similar negative funding periods, Bitcoin’s average return over the next 30 days can reach 13%, and over 180 days, as high as 101%.

● Besides macro indicators, specific price patterns also speak. Analysts are closely watching the 200-week exponential moving average (EMA), a long-term lifeline. Although prices temporarily broke below this trendline, bulls’ defense has not completely collapsed. Some believe the current price structure resembles the 2023 market—after repeated battles around the 200-week EMA, the market then entered a subsequent upward phase.

3. Cycle Theory “Judgment”: Bottoming Out Might Take 200 Days?

Beyond immediate technical indicators, discussions about Bitcoin’s four-year cycle have resurfaced, but with some new perspectives.

● Jan van Eck, CEO of renowned asset manager VanEck, recently stated that Bitcoin might already be near the bottom of this cycle. However, he also pointed out that the traditional “four-year cycle theory” may be failing. With spot ETFs launching and institutional participation deepening, the dominant market forces are shifting from halving narratives to macro liquidity and compliance-driven allocations.

● This view suggests that the pattern of sharp rises immediately after halving may be a thing of the past, replaced by a more gradual, prolonged “structural re-pricing.” Although prices may have bottomed, based on historical models, a genuine trend recovery might require a long bottoming process.

● Some analysts estimate that it could take about 200 days of oscillation and accumulation for market sentiment to fully recover and for a new major rally to begin, pointing roughly to Q4 2026.

● This implies that even if the worst is over, it doesn’t mean immediate profits. The market could enter a wide-ranging “bull-bear trap” phase, causing impatient leveraged traders to repeatedly stop out.

4. Divided Future: Three Paths and One Consensus

Based on current technical and macro conditions, market analysts outline three most likely scenarios for the coming months, nearly covering all bullish and bearish expectations:

1. Despair Scenario (Pessimistic): If the Fed delays rate cuts due to rising oil prices, ETF inflows could reverse again, and Bitcoin might break below $68,000 support, testing $63,000 or even $60,000. Discussions of a “$40,000” target would intensify.

2. Pragmatist Wait-and-See (Neutral): Currently the most probable scenario. Bitcoin oscillates within a broad range of $60,000 to $75,000, gradually digesting overhead supply through time. This pattern frustrates traders chasing the market.

3. Optimist Dream (Optimistic): If ETF inflows remain strong and regulatory breakthroughs (like the “CLARITY Act”) occur, Bitcoin could break above $75,000 resistance, challenging $84,000 and previous highs.

Despite the divergence, both sides agree on one point: current levels are no longer suitable for panic selling. Whether bears target $45,000 or bulls aim for new highs, all recognize that extreme technical indicators suggest selling pressure has waned.

Amid this noisy disagreement, perhaps as a seasoned trader said, “This is not a time for panic, but a test of discipline and patience.” Whether from the weekly RSI lows or massive ETF inflows, the fact remains: the market is resetting, not collapsing. When the last bulls and bears stand firm, the true direction may quietly emerge.