Bitcoin Rebound Stalls as Analysts Warn of Capitulation Risk

Bitcoin's recent rebound has stalled below key averages as analysts warn of potential capitulation. The cryptocurrency traded above $66,000 after a brief dip to $67,000 the day before, following improved sentiment due to a preliminary peace agreement between the United States and Iran.

Crypto analyst Doctor Profit compared Bitcoin's current weekly chart with its structure seen before the FTX collapse in 2022. At that time, Bitcoin moved higher while forming a bullish divergence near $20,000. Many traders viewed the signal as an early recovery, but a sharp selloff followed and pushed the market into capitulation.

Doctor Profit said a similar divergence has appeared again as Bitcoin attracts renewed buying interest. However, he questioned whether the rebound marks a durable bottom, stating that 'the market could still face one final capitulation move.'

On-chain figures also show a wide gap between unrealized and realized losses. Alphractal founder Joao Wedson said Bitcoin holders currently carry one of the largest unrealized losses in the asset's history. However, realized losses remain lower, suggesting many investors have not sold.