Bitcoin rebound hype fades as range highs crumble: Here’s why BTC is volatile

Bitcoin’s recent attempt at a bullish recovery has hit a significant roadblock as the cryptocurrency struggles to maintain its footing above key resistance levels. After a brief surge that ignited hopes for a sustained rally, the market sentiment has quickly shifted to caution. The ‘rebound hype’ is officially fading as Bitcoin’s price crumbles from its recent range highs, leaving investors questioning the short-term trajectory.

Several factors are driving this renewed volatility. Firstly, macroeconomic uncertainty continues to weigh heavily on risk assets. Recent economic data and signals from central banks regarding interest rate trajectories have kept traders on edge, leading to rapid sell-offs whenever the price hits psychological ceilings.

Secondly, the market is experiencing a liquidity imbalance at higher price points. While spot demand remains present, it hasn’t been sufficient to absorb the selling pressure from profit-takers and institutional players. This often results in sharp, erratic price swings as the market searches for a stable floor.

Additionally, the impact of spot Bitcoin ETFs has become a focal point for volatility. While these instruments provided the initial momentum for the year’s gains, any slowdown in net inflows—or periods of net outflows—creates immediate downward pressure on the price. This frequently triggers cascading liquidations of leveraged long positions, further accelerating the decline.

As Bitcoin retreats back into its established trading range, the technical outlook suggests a period of consolidation. For now, the initial excitement has been replaced by a ‘wait-and-see’ approach as the market awaits a more definitive catalyst to break the current cycle of volatility.

Source: Bitcoin rebound hype fades as range highs crumble: Here’s why BTC is volatile