Bitcoin’s ‘Buy-the-Dip’ Narrative Faces Tough Questions as Another 25% Risk Builds

Bitcoin’s recent rebound has revived the buy-the-dip narrative, but the data tells a more complicated story. After falling nearly 15% and briefly touching the $60,000 zone, the Bitcoin price bounced more than 11%, drawing traders back into long positions. At first glance, the bounce looks encouraging. However, bearish chart patterns, rising leverage, and fragile spot demand suggest the market may not be out of danger yet. With a potential 25% downside still in play, the latest bounce is now facing serious scrutiny. Bear Flag, Rising Leverage, and Falling Exchange Supply Signal Risky Optimism Bitcoin’s short-term risk is already visible on the 4-hour chart. After the sharp sell-off toward $60,000, the Bitcoin price formed a rebound structure that now resembles a bear flag pattern. This setup typically appears when the price pauses after a strong drop before continuing lower. If the lower trendline breaks, the pattern points to a downside move of nearly 25%, targeting the $48,000–$49,000 zone. Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here. Bearish BTC Structure: TradingView Despite this technical warning, leverage is rising again. Following the 11.18% rebound, more than $540 million in new long positions were built on Binance alone. This shows that traders are once again using heavy leverage, betting that the bottom is already in. Similar behavior has preceded major liquidations in past downturns. Long Leverage Comes Back: Coinglass At the same time, spot market behavior reflects a growing buy-the-dip mindset. Bitcoin supply on exchanges fell from around 1.23 million BTC to 1.22 million BTC between February 5 and February 6. This decline suggests that traders are withdrawing coins, possibly for short-term holding, expecting higher prices. BTC Supply Dips: Santiment Public figures and social media sentiment have also turned more optimistic, reinforcing the ‘Buy-the-Dip’ narrative. Buying $2,000,000 of btc at 67,...