Bitcoin Bounce Warning: Capitulation Still Ahead After $59K
Bitcoin bounce is rallying after a “Friday massacre,” with BTC rebounding from around $59,000 to $64,000, then stalling near $63,000. BTC previously broke below $60,000 for the first time since before the 2024 US presidential elections, after a rejection at ~$82,000 in mid-May.
The rebound appears linked to improved US–Iran headlines. But analyst Merlijn The Trader warns this Bitcoin bounce may be a prelude to capitulation, not a full reversal. Using a 2022 bear-market pattern, he expects a short surge toward $65,000–$70,000 before the next major leg down.
Crypto market structure also signals risk. CoinGlass data shows daily liquidation totals have risen above $600M, with short liquidations dominating at ~$467M. That suggests leveraged longs are still being squeezed, and volatility remains high.
If history repeats, the key “DCA zone” for this next downside cycle is projected between $48,000 and $59,000—meaning traders should avoid going “all-in” on the Bitcoin bounce and instead plan for potential drawdown risk.
Bearish
The article frames the current move as a likely “bounce before capitulation.” The analyst (Merlijn The Trader) ties the setup to a 2022 bear-market sequence: first a sharp rebound after a breakdown, then a larger forced sell-off where price ultimately returns to a lower accumulation/DCA band. That historical parallel matters because these patterns often trap late dip-buyers during the rebound phase.
Short-term impact: liquidation data (over $600M daily, with ~$467M shorts) implies ongoing leverage flushes. Traders should expect whipsaws and failed follow-through on breakouts around the $63k area, since short liquidations and volatility can fuel short-term pops.
Long-term/next-leg impact: if BTC indeed revisits a $65,000–$70,000 overshoot before dropping into a $48,000–$59,000 DCA zone, then the near-term rally may provide distribution rather than reversal. That typically keeps broader market sentiment cautious and pressures altcoins to remain correlated with BTC downside risks.