Bitcoin's 47% Bounce from July Low Has Spotty Track Record, Binance Research Says

Bitcoin has climbed about 47% since hitting a July low. Binance Research noted that in four out of five historical instances, comparable recoveries revisited their troughs.

The study connects each result to how far Bitcoin fell from its all-time high. Currently, the indicator triggered 35.6% beneath the peak, placing it within the category that typically did not hold.

Why Does a Shallow Drop Make Bitcoin’s Rebound Fragile?

The weekly report from Binance Research monitored a dual-condition indicator. Bitcoin needs to finish at least 40% higher than its cycle low while remaining 25% or more under its record high.

Between 2011 and 2023, Binance identified seven such signals. On two occasions, Bitcoin was 75.5% and 67.1% below its peak, and both recoveries persisted until new highs were hit.

The remaining five signals arose from milder declines between 30% and 38%, and four of them revisited their lows within 43 days. Only the July 2021 indicator held up.

“A plausible explanation is that after a deep drawdown, forced selling has likely been largely exhausted, so a 40% rebound is more likely to reflect genuine demand. After a shallower drawdown, fewer holders were pressured to sell, so the rebound carries less information about underlying demand,” the team said.

The current indicator activated on September 3 with Bitcoin 35.6% beneath its high, putting it in the shallow-decline category. Binance Research recorded the October 1 closing price as $84,880, which is 46.9% above the $57,800 low.

Bitcoin's February 6 low of $60,000 was broadly considered the floor, and the price recovered 38% by May. Subsequently, it fell below that level on June 5 and dropped to $57,800.

“The current rebound is a second attempt from a similar position, so the decline to date offers no protection against a retest,” the firm wrote.

Binance Research emphasized that the findings represent a base rate, not a prediction.

What Could Decide Bitcoin’s Next Move This Month?

At the time of writing, Bitcoin was at $85,431, a 0.95% decline over 24 hours according to BeInCrypto Markets. Under this setup, the indicator remains valid if Bitcoin reaches a new peak above $126,200 before falling below $57,800.

However, Bitcoin needs to overcome a Binance selling wall stretching from $85,000 to $85,500. Glassnode indicated that surpassing the wall would verify that the upward trend is expanding. Such a breakout should occur on increasing volume and with ETF inflows resuming.

In the week prior to September 28, spot Bitcoin ETFs attracted $2.39 billion. Over the following four trading sessions, inflows amounted to only $51.25 million. This deceleration challenges Citi, which lifted its 12-month price target to $113,000 based on an expected $5 billion in ETF entries.

US CPI figures are due on October 14, and the Federal Reserve convenes on October 27 and 28. Additionally, defunct exchange Mt. Gox faces an October 31 repayment deadline involving 34,387.51 BTC, which ranks among Bitcoin's October risks.

CoinGlass data shows that Bitcoin has gained 2.23% over the initial six days of October. Since 2013, the month has produced a median return of 12.73%.

Binance Research noted that a typical October would facilitate a sustained reset. A poor month would indicate the rebound lacks momentum.