Bitcoin Faces Fragile Recovery Amid Global Turmoil and Fading Traders’ Risk Appetite
Written by Samer Hasn, Senior Market Analyst at XS.com
Bitcoin attempted to recover today after two consecutive days of decline, climbing back above $109,000 while continuing to move within a consolidation phase.
The broader market backdrop suggests that Bitcoin’s current resilience may not be sustainable. The market continues to undergo a deep deleveraging phase, where leveraged traders exit amid persistent uncertainty or even liquidated.
According to CoinGlass data, nearly $840 million in long futures positions have been liquidated, compared to around $430 million in shorts in the last two days, underscoring a still-imbalanced market structure toward bearish. Besides, futures open interest for the broader crypto market nearing its lowest level since July. The severe liquidations made traders less willing to take risks with leverage.
Even on spot market, the On-Balance Volume (OBV) indicator for bitcoin, which tracks cumulative buying and selling pressure, has failed to maintain its recent upward trajectory and slumped to its lowest level since April. This decline signals that accumulation momentum has weakened, with bulls appearing hesitant to commit new capital amid weak fundamentals and fading confidence.
Without sufficient buying pressure, sellers are likely to regain control, potentially breaking the current consolidation pattern. Bitcoin, therefore, remains trapped in a bearish structure where each rebound forms a lower high, often followed by a lower low.
In such an environment, any short-term recovery may prove to be merely corrective rather than the start of a sustained uptrend. The lack of reaccumulation and declining on-chain activity both reinforce the view that speculative flows are drying up as macroeconomic uncertainty grows.
That uncertainty extends well beyond the crypto sphere. According to The Wall Street Journal, U.S. technology stocks retreated nearly 1% on the Nasdaq after reports that the Trump administration is considering sweeping export restrictions on software-related products to China, as reported by Reuters.
The potential measures target goods such as laptops, medical devices, and software-integrated technologies in response to Beijing’s recent curbs on rare earth exports. This escalation of trade hostilities has reignited investor fears of a broader global supply chain disruption.
Adding more fuel to the global fire, Washington has imposed new sanctions on Russia’s two largest oil firms, alongside nearly three dozen subsidiaries. Markets reacted with heightened caution, as the sanctions raise the risk of energy supply disruptions, potentially reigniting inflationary pressure across commodity markets and further complicating the Federal Reserve’s policy path.
Meanwhile, the New York Times reported that the ongoing U.S. government shutdown, now entering its fourth week, is beginning to have a measurable drag on the American economy. Unlike previous shutdowns, the current one threatens deeper and more lasting effects due to the suspension of critical federal services that underpin commerce and consumer confidence. Economists estimate the shutdown could trim annual GDP growth by 0.1 to 0.2 percentage points per week, amounting to an economic loss between $7.6 and $15.2 billion weekly.
The prolonged fiscal standoff has heightened uncertainty just as markets grapple with trade disputes and tightening financial conditions, creating a complex and fragile backdrop for both equities and crypto assets.
Altogether, Bitcoin’s modest rebound seems more technical than structural. With deleveraging continuing and fundamentals failing to improve, the market’s fragility remains exposed. Broader macro pressures are collectively draining risk appetite and amplifying volatility. Unless a clear catalyst emerges to restore confidence, Bitcoin’s path may stay vulnerable to further downside, with any rallies likely to remain short-lived within the broader bearish framework.
