Bitcoin’s Relief Rally Lifts Spirits: Is it Time to Buy the Dip?

The crypto market is showing tentative signs of a recovery following a bruising sell-off, leaving traders grappling with a critical question.

The upward swing saw Bitcoin bounce from Wednesday’s intraday low of $99,600 to trade around $103,400, according to CoinGecko data. 

But is it the start of a sustainable rebound or a temporary respite before further declines?

“Liquidity behind Bitcoin is starting to make a recovery,” wrote in a tweet on Wednesday, suggesting that a price confirmation could follow in two weeks.

Bitcoin has shed roughly 25% from its October peak, pushing the supply of coins held at a loss to 28.1%, CryptoQuant data shows.

Historical data show that such supply losses have often preceded price reversals. A spike in this metric to 27% in April 2025 preceded a 70% rally in Bitcoin. Back in September 2024, it kicked off a 125% surge.

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Still, some analysts caution that the current bounce lacks the hallmarks of a proper recovery. 

“What we are looking at right now is a technically driven rebound, being supported by spot inflows and leveraged short-covering,” told Decrypt. “So it’s not necessarily a resurgence of long-term conviction.” 

The market needs to see consistent on-chain accumulation by long-term holders and stabilized funding rates for this bounce to become an enduring bottom.

“The recent relief bounce could come across as active dip-buying, but it is not yet eligible to be considered a full-scale recovery signal,”

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For bulls, the $100,000 zone is forming as a potential accumulation range that could fuel a mid-term recovery into 2026, told Decrypt. The weekly candlestick close needs to hold above $103,000.

For bears, the current uptick is a standard bear market bounce within a cooling cycle. If the trend persists, the dip buying zone could extend from $93,000 to $88,000, experts previously told Decrypt.

The recent drop caused the end-of-year target for Bitcoin to be lowered from $185,000 to $120,000, signaling tempered expectations after the recent selloff.

The deciding factor or pivotal catalyst that could put this outlook on its head is the macro backdrop. A period of choppiness is expected ahead unless a positive catalyst, like an end to the government shutdown, changes the underlying economic outlook.