Bitcoin price recovered above $81,000 on March 11, bouncing back as U.S. stock futures showed signs of stabilizing after a severe market sell-off.
The cryptocurrency gained nearly 4% after reaching $76,600 on Bitstamp the previous day. The recovery coincided with modest rebounds in traditional market indicators.
Data from multiple trading platforms confirmed the upward movement. This came after Bitcoin had hit four-month lows amid widespread market panic.
Wall Street experienced significant losses during the previous trading session. The S&P 500 dropped 2.7% while the Nasdaq Composite Index fell 4% as recession fears intensified. Nasdaq 100 futures had recovered approximately 0.4% at the time of reporting.
"Are we overdue for a massive short squeeze?" trading resource The Kobeissi Letter questioned in a social media thread. The post noted that market sentiment had reached "extreme fear" territory.
"Even bears who are calling for a prolonged bear market would need to see some relief rallies. Markets do not move in a straight-line long-term. Eventually, a (tradable) short squeeze is inevitable," the analysis continued.
Several market analysts pointed to unusually high readings from the VIX volatility index as evidence supporting a potential turnaround. Network economist Timothy Peterson, who has developed Bitcoin price forecasting tools, stated, "$VIX has only been higher 11% of the time, going back to 1990. Put another way, there is an 89% chance that today was the bottom."
On technical analysis fronts, trader Cas abbe observed, "BTC just had a bullish divergence on the 4H timeframe. I'm not saying this is the reversal but a short-term pump looks imminent now." The analysis referenced relative strength index signals often used to predict price movements.
Not all voices were optimistic, however. Trader and analyst Rekt Capital advised followers to monitor daily chart indicators for confirmation of a sustainable price recovery.
Other market participants remained cautious about long-term prospects. The pseudonymous trader HTL-NL expressed doubt that Bitcoin would match its previous all-time highs. "Before anyone of you think this is specifically happening in crypto: it's not," HTL-NL noted. "It happens to all risk off assets. It's called a recession probably. US is in for a very tough time."