Bitcoin’s bullish phase is forming – But overbought conditions suggest…
Is Bitcoin finally breaking out of its long-standing downtrend, or is it just a short-term thing?
The crypto market is seeing a major shift in investors’ sentiment. In H2 2027, the digital assets market is experiencing bullish sentiments after failing to break through the long-standing resistance level in H1 2027.
According to CryptoQuant’s recent analysis, Bitcoin [BTC] is moving away from a weakness zone and toward a possible bullish phase. This conclusion was drawn based on Bitcoin’s bubble-versus-crash market structure indicator, which clearly showed that the extreme conditions associated with either a speculative bubble or a severe crash have faded.
Bitcoin has already gone through a period of correction/consolidation, but it has not yet experienced the kind of extreme speculative mania that historically marked major cycle tops. Therefore, the analyst believes BTC could still have room to enter a stronger upward trend.
As per CryptoQuant,
The full-fledged bullish rally has not yet begun. Currently, it is in the process of gradually approaching that stage.
Wall Street bets more on Bitcoin than gold
This comes as JPMorgan sheds light on the fact that institutional investors are more defensively positioned toward Bitcoin than gold. This, along with short interest and put options around Bitcoin ETFs such as BlackRock’s IBIT, now provides more downside protection.
The comparison with gold suggests Bitcoin currently has relatively heavier bearish hedging, while gold ETFs have recovered more of their 2026 outflows. Meanwhile, heavy put-option activity around Bitcoin ETFs indicates investors are protecting against downside. However, this does not necessarily mean they are outright bearish.
In other words, if BTC rallies, these hedges could be unwound, adding further buying pressure. This could in turn lead to a potential market impact of hedge unwinding and short covering worth $1 trillion.
Market dynamics paint a bearish picture
This comes as the price of Bitcoin was changing hands at $78,240.79 at press time after a hike of 2.5% in the past 24 hours. At the same time, the RSI was in the overbought zone, further creating a warning sign that bears might tend to pull the bulls back.
This happened along with the widening Bollinger Bands suggesting that Bitcoin is very volatile at the moment. Adding to the concern was AMBCrypto’s recent report that suggested that crypto’s Q4 outlook is turning cautious as the Fed’s 25 bps rate hike, rising Treasury yields, and a stronger U.S. dollar threaten liquidity and risk assets.
Final Summary
- The extreme conditions associated with either a speculative bubble or a severe crash around Bitcoin have faded.
- However, the RSI and Bollinger bands’ RSI suggest that bears might pull the bulls.
