Bitcoin Rebounds from Intraday Low as Spot Demand Takes Hold

Bitcoin staged another sharp intraday recovery on Wednesday, rebounding more than $1,500 after sliding towards $77,600 as investors digested surging oil prices and uncertainty over US interest rates.

BTC traded as low as roughly $77,638 before recovering above $79,000 during the Asian session. Brent crude was approaching $100 a barrel, while markets were also preparing for US inflation data and next week's Federal Reserve decision.

Spot demand has been driving the rebound, with Bitfinex's trading desk noting that Bitcoin is in a 'market driven by spot buying', and identifying roughly $77,100 as support. This type of rally can be more durable than one built mainly on leveraged futures positions, which can unwind quickly when prices fall and liquidations begin.

Analysts are paying close attention to the $77,000-$78,000 region, with some identifying roughly $77,500 as an important support area and $79,500-$80,000 as the first zone bulls need to reclaim. A weekly close below ~$78,300 followed by a failed bounce could signal that the buyers who stepped in at this level are gone and liquidation-style selling returns.