Bitcoin Rebounds to $62,000 After Monday’s Drastic Selloff

Bitcoin Rises to $62,000 After Monday’s Heavy Sell-Off

Bitcoin (BTC) returned to $62,000 just days after a sharp sell-off on Monday, Aug. 5, which saw BTC drop from $64,000 to $49,500. Bitcoin has since recouped most of the decline. On Aug. 8, Bitcoin briefly touched $62,510 before settling at $61,068. The asset is up over 25% from the lows reached on Aug. 5, but is still down 5% over the past 7 days, according to CoinMarketCap data.

The rapid recovery comes after Bitcoin fell below key support levels of $50,000 on Aug. 5, marking the first time it has fallen below that threshold since February. The rapid recovery has led some traders to speculate that the price drop could be a bear trap, a strategy in which traders temporarily drive down the price of an asset to lure short-term sellers. In a post on X, pseudonymous trader Byzantine General described the week’s events as “probably the most epic bear trap I’ve ever seen.”

Sentiment among traders has shifted, with futures markets now largely favoring long positions. CoinGlass data shows that 52.48% of positions are long, while 47.52% are short. However, if Bitcoin falls below the critical $60,000 level again, significant leveraged long positions could be at risk. Despite the optimism, some analysts remain cautious. Markus Thielen, head of research at 10x Research, suggested targeting Bitcoin prices below $40,000 to effectively time the next bull market entry.

On the other hand, Morgan Stanley, the largest asset management company in the US, has authorized 15,000 of its financial advisors to recommend Bitcoin exchange-traded funds (ETFs) to their clients, which has the potential to increase market confidence.