Bitcoin’s Push: New Uptrend or Just a ‘Dead Cat Bounce’?

BTC bulls aim for $70K resistance. Trend reversal incoming?

Bitcoin started to gain traction after President Trump’s State of the Union (SOTU) address, even though the speech did not address crypto directly. It might have been just a coincidence, and the sudden shift in sentiment could stem from a totally different reason.

Since mid-January, Bitcoin and most other cryptocurrencies have been stuck in a selling loop, with prices constantly declining and little to no buying pressure. The CoinMarketCap Fear and Greed Index reached a low of 5 on February 6. To put things into perspective, this is the lowest the index has been since its inception. Since then, it climbed to 14, where it’s currently standing at the time of writing. This is still considered ‘extreme fear’, but at least there’s improvement.

The Jane Street conundrum and BTC price implications 

On Wednesday, Bitcoin’s price showed clear signs of improvement, and this appears to be a consequence of the Jane Street Group debacle. Administrators of Terraform Labs (TerraUSD, LUNA) have filed an insider trading lawsuit against Jane Street, claiming the latter benefited from restricted information. According to the administrators, this played a part in Terraform’s collapse.

In response, Jane Street representatives denied these accusations and said it’s just a case of trying to find a scapegoat for Terraform’s downfall. But still, the lawsuit raised many eyebrows because Jane Street is a major market maker, involved in ETFs and derivatives. Moreover, analysts on X claimed that Jane Street executed large Bitcoin sell orders almost every day, around 10:00 am ET, when liquidity was low. This alleged behavior increased selling pressure and created a snowball effect where buy positions were liquidated.

Could this be the reason why Bitcoin had such a massive losing streak starting from mid-January? It’s unclear. It must be noted that these allegations have not been verified by any regulator, and there are no trading records. At this point, it could all be called speculation, but one thing is clear: since the Jane Street “speculation” hit the mainstream, Bitcoin regained its traction.

Chart Analysis – BTC/USD

Bitcoin is at an important crossroad: if it can push past the $70K – $71K resistance zone, there’s a good chance we will see a more sustained recovery. On the other hand, if this week’s rally is erased, the medium-term outlook will become very bleak, with possibly another descent to $60K.

Wednesday’s candle was long and had good volume, but the same cannot be said about Thursday’s candle, which was significantly weaker. Two massive green candles would suggest sustained buying pressure, but the current price action looks more like a temporary relief rally. The next medium-term move is uncertain until the price exits the range between $65K and $70K.