After the big drop on October 10 – which saw Bitcoin (BTC) hit $102,000 before recovering some losses – some analysts are now predicting that the top cryptocurrency could be on the verge of another rally as it enters a ‘phase of disbelief’.
Bitcoin in a phase of disbelief – trouble for the bears?
According to a CryptoQuant Quicktake post by Darkfost contributor, Bitcoin appears to be entering a phase of disbelief, increasing the possibility of a reversal to the upside. The contributor highlighted the slightly negative funding rate to support his analysis.
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For the uninitiated, the stage of disbelief in Bitcoin occurs when a new uptrend begins, but most investors remain skeptical after the recent correction, doubting that the recovery is real. During this phase, prolonged bearish sentiment and short positions often act as fuel for stronger growth once confidence returns.
Darkfost stated that investor skepticism towards BTC’s return to bullish mode can be gauged through BTC funding rates in the derivatives market. Funding rates remained negative at -0.004% on six of the seven days in the past week, indicating traders remain slightly bearish.
A likely reason behind traders’ short bias is the October 10 crypto market collapse it led to a $19 billion liquidation. Since then, traders have consistently chosen to short the market rather than get trapped in another price pullback.
However, the longer BTC remains in the disbelief phase, the stronger the potential for an explosive upward move. Darkfost added:
If the current uptrend continues to establish, the growing pile of short positions against it could become powerful fuel for the next leg higher. For those shorts to liquidate, it would push prices up, causing a short squeeze.
If a short dip occurs, BTC could quickly recover to the main liquidity zones around the $113,000 level and even to the $126,000 region, where significant short order liquidations are clustered.
The analyst shared two previous cases where such a pattern played out. In September 2024, BTC fell to $54,000 before jumping to a new all-time high above $100,000.
Similarly, in April 2025, the leading digital asset rose from $85,000 to $111,000, before climbing even higher to $123,000. To conclude, the bitcoin market could be on the verge of another short decline, fueled by investor skepticism.
BTC investors should be careful
Although BTC is showing signs of a looming short-term decline, investors should still be cautious before entering the market in hopes of an immediate reversal in sentiment. For example, recent Bitcoin activity fainted below its 365-day moving average, prompting fears of a loss of momentum.
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That’s what some crypto analysts said prognosis that BTC is probably done with its price correction and will rise in the coming days. At press time, BTC is trading at $110,814, up 2.8% in the last 24 hours.
Featured image from Unsplash, charts from CryptoQuant and TradingView.com
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