- Bitcoin’s disbelief phase shows traders staying cautious, but their skepticism could ignite the next big recovery rally soon.
- Negative funding rates and short dominance reveal fear in the market, yet these factors could trigger a strong short squeeze.
- On-chain data and past cycles suggest Bitcoin may rebound toward $113K to $126K if current support levels hold firm.
Bitcoin’s market may be entering a critical phase known as the “disbelief stage,” signaling a possible setup for recovery. According to CryptoQuant analyst Darkfost, this moment occurs when a correction ends and a new uptrend begins, but investors remain doubtful. Many traders, still shaken by the October 10 liquidation event, have kept a bearish stance. This sentiment, however, could paradoxically fuel Bitcoin’s next strong rally.
Currently, Bitcoin’s derivatives data reflects this hesitation. Funding rates on Binance, the largest futures platform, have stayed negative for six of the past seven days, sitting near -0.004%. This trend shows that short positions continue to dominate the market.
Consequently, as the current uptrend strengthens, these short positions could become catalysts for an upward breakout. Once liquidations occur, they can drive Bitcoin’s price higher in a rapid short squeeze.
Derivatives Market Signals Recovery Potential
According to Darkfost, periods of disbelief have traditionally resulted in notable recoveries. He cited other instances, such April 2025, when Bitcoin rose from $85,000 to $123,000, and September 2024, when it fell to $54,000 before taking off past $100,000. These examples demonstrate the speed at which incredulity can be converted into strong rising momentum. Therefore, if Bitcoin keeps up its current trajectory, liquidation clusters may push it closer to $113,000 and even $126,000.
Additionally, Glassnode data supports the idea of a turning point. The analytics firm reported that Bitcoin has reclaimed the 0.85 cost-basis band, a key risk level that has turned into support. “If buyers can hold this zone, momentum can rebuild from here,” Glassnode stated. “But lose it again, and the market likely revisits lower territory.” This technical area remains pivotal in determining Bitcoin’s near-term direction.
Investor Behavior and On-Chain Signals
Moreover, CryptoQuant analyst Cryptometugce added another layer of insight. He explained, “STH-SOPR data will start to make a dive into the Green Zone. Those moments are the place for the smart investor to buy their losses.” This pattern indicates that short-term holders are beginning to sell at losses, which historically marks an accumulation phase.
