Bitcoin's 40% Rally Sparks Debate on Bull Market Return

Bitcoin has staged a remarkable recovery in recent months, climbing from a low near $58,000 in late June to around $86,000 in early October. This rally, ranging from 40% to 50% depending on the starting point, has sparked debates about whether a new bull run is underway or if this is merely a temporary bounce within a longer downturn.

Several positive indicators suggest a potential bull market revival. Bitcoin has reclaimed its 365-day moving average, a key long-term signal, and closed above its 50-week moving average for the first time in 45 weeks. Additionally, US spot Bitcoin ETFs have seen three consecutive weeks of inflows, totaling about $241 million in the week ending October 2. On-chain data also shows that most holders are now in profit, reducing the pressure for forced selling.

However, caution remains warranted. Bitcoin still trades about 32% below its all-time high of $126,000, and faces strong resistance between $88,000 and $90,000. Macroeconomic challenges, including potential Federal Reserve rate hikes and regulatory uncertainty, add to the risks. Some analysts also note that part of the rally was driven by supply tightening and short squeezes rather than sustained demand, which could make the uptrend less durable.

Looking ahead, key price levels to watch include support at $85,000 and $80,500, and resistance at $87,000 and $90,000. Three scenarios are possible: a breakout above $90,000 confirming a bull market, a consolidation within a range of $78,000 to $90,000, or a pullback toward $65,000 to $75,000 if negative factors prevail.