Bitcoin has surged past the $97,000 mark for the first time since early November, sparking a wave of optimism in the cryptocurrency market after a prolonged spell of uncertainty. This latest movement follows weeks of consolidation, during which bearish sentiments gained traction and predictions of a potential trend reversal became commonplace among analysts.
The breakout above the psychological $97,000 level challenges these bearish narratives, igniting a renewed discussion on whether Bitcoin is genuinely re-establishing bullish momentum or merely undergoing a temporary recovery.
According to market analyst Darkfost, the current rally exhibits attributes of a technical rebound rather than a definitive trend reversal. Short-term holders (STHs) are particularly sensitive to price fluctuations and market volatility, actively managing their positions in response to the recent price movements.
After a recent price correction, many of these short-term investors seem to prioritize capital preservation over aggressive accumulation. As Bitcoin approaches key levels, a noticeable portion of STHs has seized the rebound to secure profits, indicating that confidence among this group has not fully recovered. While the climb above $97,000 has improved market sentiment, it has concurrently opened the door to profit-taking as investors look to cash in on recent gains.
Darkfost’s analysis reveals that short-term holders have increasingly shifted their focus to preserving capital as Bitcoin continues its ascent. With the average realized price for this group hovering around $102,000, the current rebound places them close to their cost basis, a price level that traditionally fosters defensive behavior instead of aggressive buying strategies. Instead of positioning for prolonged upward movements, many participants appear inclined to decrease their risk as market conditions stabilize.
This cautious approach was evident on January 6, when Bitcoin tested the $94,000 level for the first time since mid-November. At that juncture, short-term holders transferred over 30,000 BTC in realized profits to exchanges, signaling a readiness to exit positions during the market rebound.
The pattern amplified during the latest price spike. As Bitcoin broke past $97,000, on-chain data indicated that more than 40,000 BTC in profits were sent to exchanges in a single day. This highlights the lingering effects of previous market corrections on short-term sentiment; many STHs remain wary and hesitant to hold through uncertain times after experiencing previous drawdowns.
For confidence to return, Bitcoin likely needs to achieve further price increases and maintain levels above significant thresholds. Without a notable expansion in unrealized profits, short-term holders may continue their trend of selling into strength, which could hinder market momentum until stronger signs of bullish conviction emerge.
On a technical note, Bitcoin’s 3-day chart indicates a constructive rebound, albeit within a mixed broader structure. After discovering a local bottom in December near the mid-$80,000s, Bitcoin has formed a series of higher lows, suggesting a recovery in momentum. The recent climb towards the $96,000–$97,000 range represents a meaningful advance, returning prices above the short-term moving average and inching closer to a key former support-turned-resistance zone.
Despite this positive price action, the larger trend continues to suggest consolidation rather than a confirmed reversal. The price remains below the declining medium-term moving average, which has acted as a resistant barrier since the November correction. This scenario indicates that while buyers are regaining some control, sellers are still actively defending higher price levels.
Long-term moving averages are still on an upward trajectory and remain below the current price, signaling that the macro trend has not fully decayed. Additionally, the price rebound has not been matched by a sustained increase in volume, pointing towards lingering caution among traders and lending a corrective nature to the current movement.
In the immediate future, maintaining a position above the recently reclaimed area could solidify the bullish perspective and pave the way for a test of the coveted $100,000 threshold. Conversely, failure to hold these levels could leave the market vulnerable to renewed downward pressure, pushing prices back towards lower consolidation territories.
