The Bitcoin price has rebounded nearly 20% after slipping close to $60,000 on February 6. The move has revived “buy-the-dip” hopes and fueled talk of a local bottom. At the same time, US demand indicators have started to recover from recent lows.

But beneath the surface, volume signals, on-chain data, and price structure suggest the rally may be fragile. Several warning patterns now resemble setups that preceded major declines in this cycle.

Bear Flag Shows Big Money Is Not Fully Committed

One of the clearest warning signals comes from the Klinger Oscillator, a volume-based indicator that tracks big money flow.

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Unlike indicators such as the CMF, which focus mainly on short-term big-money pressure, the Klinger Oscillator measures large-wallet volume intensity across trends. It is designed to highlight how large players position themselves over time, not just day-to-day activity.

In simple terms, it shows whether big money is quietly accumulating or preparing to sell into rallies.

Between October 6 and January 14, Bitcoin fell from around $126,000 to $97,800, a decline of roughly 22%. During that period, the Klinger Oscillator moved higher while the price weakened. This created a bearish divergence.

That divergence warned that volume strength by large wallets (possibly whales and institutions) was not supporting price recovery. Within weeks, Bitcoin extended its decline toward $60,000 as the Klinger reading dropped sharply (possible big money outflows).

A similar pattern is forming again.

Between February 2 and February 9, the price drifted lower while the Klinger Oscillator trended upward. This suggests large players may be positioning (recent buys) to sell into rebounds rather than build long-term exposure.

At the same time, Bitcoin’s drop from mid-January to early February formed a sharp downside “pole.” The current price bounce movement resembles a bear flag, a pattern that often signals a continuation of the lower trend, with a near 40% crash possibility if the lower trendline support gives way. That could trap the bulls buying into the bounce.

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When rising Klinger readings align with a bear flag, it usually means rallies lack deep institutional support. Big players are active, but not in accumulation mode, and might distribute at any given chance. Days of BTC ETF outflows in the near term would validate the Klinger-led hypothesis.

Improving US Demand Has Failed to Mark Bottoms Before

This technical weakness does not exist in isolation. It comes even as US demand has started to improve.

The Coinbase Premium Index tracks whether Bitcoin trades at a premium or discount on US-based Coinbase compared with global exchanges. It primarily reflects American institutional demand.

On February 4, the index fell to around -0.22, showing weak US participation. This level closely matched December 31, 2024, when the index dropped to -0.23. At that time, Bitcoin traded near $93,300.

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Many traders believed a bottom had formed. Instead, the price later fell to about $76,200, a decline of nearly 18%.

Since early February, the index has recovered to near -0.07, signaling improving US interest and aligning with the Klinger oscillator’s rising reading. However, history shows that demand recovery often comes before price bottoms, not after. In 2024, US demand improved first. The deeper correction came later.

On-chain data adds another layer of risk.

The 1-day to 1-week holder group, made up of short-term traders, increased its share of supply from about 2.05% to over 3.3% since February 5 (during the 20% rebound). That is a rise of more than 60% in just days, as highlighted by HODL Waves, a metric segregating wallets by time.

This cohort tends to sell quickly when prices weaken. Their growing presence makes the market more unstable. A similar surge in short-term holders in late January was followed by a rapid 3% pullback. So far, improving US demand is being matched by rising speculation, not strong conviction.

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Key Bitcoin Price Levels Show Where the Bounce Could Fail

All signals now converge around a few critical Bitcoin price zones.

The first major support sits near $67,350. A daily close below this level could restart selling pressure.

If that breaks, the next downside targets are:

• $60,130, the recent low
• $57,900 (a key Fibonacci support and a mear 18% correction zone from the current levels)
• $53,450 a major retracement zone
• $43,470, the bear flag projection

A move from current levels to $43,400 would represent a further decline of roughly 35%. On the upside, Bitcoin must reclaim $72,330 to stabilize and get out of the possible bull trap. This level capped recent rallies.

Above that, $79,240 remains decisive. Recovering this zone would retrace about half of the prior fall and likely invalidate the bearish structure. Only then would the path toward $97,870 reopen. Until that happens, all Bitcoin price rallies remain vulnerable.

South Korea’s top financial watchdog is stepping up oversight of crypto markets days after a local exchange mistakenly distributed billions of dollars worth of bitcoin to users.

The Financial Supervisory Service said Sunday it will launch planned investigations into “high-risk” practices that undermine market order, including large-scale price manipulation by so-called whales, trading schemes tied to suspended deposits and withdrawals, and coordinated pump tactics fueled by social media misinformation.

The watchdog also said it plans to build tools that automatically extract suspicious trading patterns by the second and minute, alongside text-analysis systems using artificial intelligence to flag potential market abuse.

The announcement follows a widely reported exchange error last week in which some users of Bithumb, among the country’s biggest exchanges, were mistakenly credited with at least 2,000 bitcoin each instead of small promotional rewards, a blunder estimated at roughly $44 billion at the time.

BTC prices dropped 30% compared to the global average at the time, as some recipients tried to sell the assets. The exchange had restricted trading and withdrawals for the 695 affected customers within 35 minutes of the erroneous distribution on Friday.

Regulators said the incident exposed the “vulnerabilities and risks” of virtual assets and signaled they could conduct on-site inspections of exchanges if irregularities are found in internal control systems.

Beyond market manipulation, the FSS said it will introduce punitive fines for IT incidents across the financial sector and raise the security accountability of chief executives and chief information security officers, a shift that could have direct implications for crypto trading platforms.

The agency also confirmed it has set up a preparatory team for the Basic Digital Asset Act, which would expand Korea’s regulatory framework beyond the first phase of crypto rules.

The crackdown plan reflects a broader push by President Lee Jae-myung to stamp out what he has called “cruel financial practices,” with the FSS also outlining measures to strengthen enforcement against fraud and expand tools to combat voice phishing.

South Korean crypto exchange Bithumb said it has recovered nearly all of the Bitcoin mistakenly distributed during a promotional error that briefly disrupted prices on its platform earlier this month.

Bithumb says 99.7% of mistaken BTC has been recovered

In a notice published on its website, Bithumb said the incident stemmed from an internal mistake during a reward event on Feb. 6, when users were meant to receive small incentives denominated in Korean won. Due to a system configuration error, Bitcoin (BTC) was credited instead, prompting some recipients to immediately sell the assets.

The exchange said it has since recovered about 99.7% of the wrongly transferred Bitcoin, adding that the remaining amount was reconciled using Bithumb’s own funds after some users sold the assets during the brief window before the issue was identified.

As of late Feb. 7, the company said all affected balances had been fully restored, and customer assets were safely secured.

Bithumb moved quickly to block impacted accounts and initiate recovery procedures once the error was detected, stressing that the incident was the result of an operational failure rather than a security breach or hacking attempt.

The mistaken distribution briefly caused Bitcoin prices on Bithumb’s BTC/KRW market to plunge, diverging sharply from prices on other global exchanges. The episode highlighted how localized liquidity shocks on major platforms can affect price discovery, even when broader market conditions remain unchanged.

To address user impact, Bithumb said it would compensate traders who sold Bitcoin at unusually low prices during the incident and offer additional measures aimed at restoring confidence, including fee relief.

The exchange also said it has formed a dedicated internal task force to strengthen operational controls and prevent similar errors in the future.

Bithumb emphasized that the recovery of the assets demonstrates the effectiveness of its response systems and reiterated its commitment to safeguarding customer funds following the incident.

After falling to nearly $2.0 trillion last Friday, the total crypto market capitalization has rebounded to above $2.3 trillion. Investors appear to be spotting opportunities, and buy-the-dip sentiment is resurfacing.

The key question is whether this rebound is strong enough to form a classic V-shaped recovery. Several market signals offer insight.

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Signs of Buy-the-Dip Behavior After the Panic Sell-Off

One of the earliest and most notable signals is the renewed inflow of stablecoins into centralized exchanges. This trend reversed after months of decline, even though selling pressure remains elevated.

Rising stablecoin balances on exchanges reflect investors’ readiness to deploy capital. This signal is particularly relevant to retail traders, who primarily trade on exchanges.

Data from CryptoQuant shows that the 7-day average value of ERC-20 stablecoins flowing into exchanges on Ethereum increased from $51 billion in late December 2025 to $102 billion as of now.

The $102 billion figure also exceeds the 90-day average of $89 billion. This suggests that capital deployment has accelerated over the past few weeks.

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Although selling pressure remains significant, the growth in stablecoin inflows indicates renewed investor interest. Some market participants may already be accumulating positions at perceived market bottoms.

Additionally, the Accumulation Trend Score from Glassnode provides further confirmation. Wallets of all sizes, from small holders to large entities, are shifting toward stronger accumulation.

This indicator measures changes in balance across wallet cohorts and assigns a score between 0 and 1. Higher values indicate more aggressive accumulation behavior.

Glassnode’s chart shows the score moving from yellow and red zones (below 0.5) over the past two months to blue zones (above 0.5) across multiple wallet categories. Wallets holding 10–100 BTC stand out as the most aggressive buyers, with the indicator turning dark blue and approaching 1.

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Observations from Lookonchain, an account that tracks notable on-chain activity, further support this data. The account has repeatedly reported whale accumulation in recent periods, not only in Bitcoin but also in Ethereum.

Overall, these signals suggest that buy-the-dip sentiment is returning among both retail investors, as reflected in rising stablecoin inflows, and whales, as reflected in on-chain accumulation. However, a sustainable recovery still depends on the market’s ability to hold key levels in total capitalization.

According to well-known analyst Daan Crypto Trades, TOTAL swept the April 2025 lows, which were associated with tariff-related news, and then closed back above them. He argues that the market must hold above $2.3 trillion in the coming days to justify expectations of a recovery toward $2.8 trillion.

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“I think this is an important area for the market to hold if it wants to sustain a further relief bounce,” Daan Crypto Trades said.

He also noted that after several weeks of heightened volatility, market volatility could begin to decline. Price action may then stabilize within a defined range, allowing investors to reassess conditions and search for new opportunities.

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A recent analysis from BeInCrypto also highlighted the importance of the $71,000 level for Bitcoin. Only if the price stabilizes above this support level can the market reasonably expect a broader, more extended recovery.

XRP edged higher over the past 24 hours, rising roughly 2% in a modest relief move after last week’s sharp sell-off.

But despite the uptick, the Ripple token’s (XRP) chart indicators suggest the bounce offers little cause for celebration, with sellers still firmly in control of the broader trend.

XRP price holds near $1.45, but broader downtrend remains intact

On the daily chart, XRP remains locked in a clear downtrend, marked by a series of lower highs and lower lows since late January. While price has stabilized near the $1.45 level after briefly dipping toward recent lows, the move appears more like short-term consolidation than the start of a meaningful recovery.

Momentum indicators reinforce that cautious view.

The relative strength index (RSI) is hovering in the mid-30s, well below the neutral 50 mark, indicating bearish momentum remains intact even after the latest bounce. Historically, sustained recoveries tend to coincide with RSI reclaiming neutral territory, something XRP has yet to achieve.

Volume-based indicators also point to continued selling pressure. On-balance volume (OBV) has been trending lower, suggesting that distribution is still outweighing accumulation. This implies that recent green candles may be driven by short covering or temporary relief rather than fresh buying interest.

XRP price faces heavy resistance near $2.05–$2.30 fibonacci zone

From a trend perspective, XRP is trading well below its 20-day simple moving average, currently near $1.68. The downward slope of that moving average underscores the lack of bullish follow-through and signals that rallies are likely to face selling pressure at higher levels.

Fibonacci retracement levels drawn from XRP’s recent swing high to its January low further highlight the challenge for buyers. The $2.05–$2.30 zone, which includes the 0.382, 0.5 and 0.618 retracement levels, represents a dense area of overhead resistance. A sustained move above that range would be needed to shift the short-term outlook more constructively.

Until then, analysts say the latest 2% rise should be viewed in context — as a pause within a broader downtrend rather than a decisive change in direction. With momentum and volume indicators still favoring sellers, XRP’s price action suggests caution remains warranted in the near term.

TLDR:

• Search trends show persistent fear around the AI bubble, which historically appears during early expansion phases.
• Nasdaq returns and valuations remain far below dot-com extremes, signaling a cycle that has not reached mania.
• Rising margin debt indicates leverage growth, a pattern seen before peaks rather than during collapses.
• Market gains remain concentrated in mega-cap stocks, not broad participation typical of bubble finales.

The debate over an AI bubble has intensified as technology stocks continue to dominate market performance. New research shared by Bull Theory argues that current conditions do not match historical patterns seen at major market peaks. 

Instead, indicators point to an expansion phase rather than an imminent collapse. The analysis draws on valuation metrics, liquidity trends, and long-term bubble cycles.

AI Bubble Signals Show Fear and Concentration, Not Euphoria

Bull Theory reports that search activity for the phrase “AI bubble” remains elevated on Google Trends. High search interest reflects widespread concern rather than widespread confidence.

Historical market cycles show that bubbles tend to peak when public attention fades and belief becomes absolute. Current search behavior suggests the opposite phase, where fear and skepticism remain dominant.

Nasdaq performance also differs from past mania periods. Over the last five years, the index has risen about 88 percent, far below the twelvefold surge recorded during the dot-com era.

Valuation data supports this comparison. Dot-com Nasdaq price-to-earnings ratios reached roughly 60, while today’s Nasdaq trades near 26, according to market datasets cited by Bull Theory.

Market breadth further weakens the bubble argument. The S&P 500 equal-weight index has gained only about 10 percent over the past year, showing that gains concentrate in a small group of mega-cap firms.

Nvidia, Apple, Microsoft, Google, and Amazon account for most of the rally. Previous bubble peaks required broad participation across sectors and stocks.

Volatility indicators also signal caution. VIX spikes accompany most market pullbacks, and options data shows consistent demand for downside protection.

These patterns reflect defensive positioning rather than the low-volatility environment typical of late-stage speculative peaks.

Liquidity and Leverage Data Point to Ongoing Expansion Phase

Margin debt has climbed to about $1.1 trillion, the highest level on record. Bull Theory notes that past bubbles burst only after leverage began to contract sharply.

At present, leverage continues to rise alongside market funding activity. This trend aligns with earlier phases of historical bubbles rather than final stages.

Macro liquidity conditions also remain supportive. Central bank actions in the United States, Japan, and China have injected capital into global markets, sustaining risk appetite.

U.S. fiscal projections show federal debt rising toward $50 trillion by the end of the decade. Large-scale spending typically increases liquidity across financial systems.

Sentiment indicators show division rather than certainty. Retail traders respond to every correction with increased put option activity, while institutional investors remain cautious.

Bull Theory links this environment to the period between early warnings and the eventual peak seen in prior cycles. During the dot-com era, warnings surfaced in 1997, while the market topped in 2000.

A similar pattern appeared before the housing crash, with alerts years ahead of the final breakdown. The firm places current AI-related warnings in a comparable timeline window.

Corporate earnings also support the present valuation structure. Revenue growth from firms like Nvidia and Microsoft continues to justify capital inflows tied to artificial intelligence infrastructure.

Data from Nasdaq, Google Trends, and margin accounts collectively show a market still building momentum. The research concludes that present conditions reflect acceleration rather than exhaustion.