Bitcoin price climbed back above $71,000 over the weekend, extending its rally after one of the sharpest sell-offs of the cycle briefly sent the price down towards $60,000 earlier in the week.
The rebound comes as institutional investors appear to be treating sub-$70,000 bitcoin as a renewed buying opportunity, even as retailers look for signs that the market has bottomed out.
Bitwise CEO Hunter Horsley said in a CNBC interview that bitcoin’s pullback is landing differently with big investors than with long-term holders.
“I think long-term holders feel insecure,” Horsley said. “And I think the new investor set, institutions are kind of getting a new crack in the apple.”
Horsley added that some institutional buyers are now seeing price levels they thought they had permanently missed as bitcoin is “swept up” in a broader macro-driven selloff across liquid risk assets.
Retailers are looking for a signal
While institutions have stepped in, retail participants have been scanning the market for confirmation that the sell-off has fully exhausted itself.
Sentiment platform Santiment said in a weekend report that retailers are “meta-analyzing” the downturn and looking for evidence of others holding out before re-entering the market – behavior that often emerges near market lows.
“Retail traders try to meta-analyze the market, looking for signs that others are stopping to time their own entries,” Santiment wrote.
Google Trends data reflects the increase in awareness. Worldwide searches for “Bitcoin” hit a score of 100 for the week starting February 1 – the highest level in the past 12 months – as bitcoin’s price whipped from over $81,000 down to $60,000 before rebounding.
Searches for the term “crypto capitulation” also increased, rising from 11 to 58 in the week ending February 8.
Federal Reserve cuts coming for bitcoin price
On top of all this, ProCap Financial CIO Jeff Park suggested that the next big bull-market catalyst for bitcoin prices may not come from the Federal Reserve’s rate cuts — but from bitcoin’s ability to rise even in a tight environment.
Park described a scenario in which the bitcoin price rises along with higher interest rates as the asset’s “holy grail,” challenging traditional assumptions about liquidity and the global monetary system.
Last week, crypto exchange Bithumb said it accidentally issued more than $40 billion in Bitcoin during a promotional rewards event after a payout error gave some users thousands of BTC instead of a small cash reward.
The exchange quickly limited trading and withdrawals, recovered 99.7% of the excess Bitcoin and emphasized that the incident was not caused by hacking or a security breach.
A small amount — about 125 BTC worth about $9 million — remains unclaimed, and Bithumb said it will cover the losses with corporate funds.
The Bitcoin price was trading above $71,400 at the time of publication, stabilizing after days of extreme volatility that rattled both crypto and broader financial markets.