Matrixport Research: The Underlying Factors Behind Bitcoin's Short-Term Surge – Seasonal Effects and Changes in Position Structure

Bitcoin's current price is in a rare range of divergent signals: implied volatility and panic are rapidly declining, while expectations of macroeconomic interest rate cuts are rising, providing short-term support for the market; however, the price remains below a key resistance zone, and the trend structure has not shown a clear reversal. At the on-chain level, the "True Market Mean Price" is becoming the core benchmark for judging support and resistance, and market sentiment is highly sensitive to this price level. Although this rebound shows signs of improvement, judging from the driving forces and trend direction, it remains a tactical correction rather than a clear signal of a renewed bull market.

With the Thanksgiving-Christmas window opening, short-term sentiment and macroeconomic factors provide support.

Market indicators show that Bitcoin experienced significant panic as it approached the key $81,300 level, with option skew sharply shifting to bearish and implied volatility surging to 100% at one point. This price, known as the "true market average," corresponds to the average cost of active investors. A drop below this level would cause a large number of active positions to enter the loss zone, making the sentiment in this area extremely volatile.

After the panic peaked, the market experienced structural easing: Federal Reserve officials reiterated that a December rate cut was still an option, rapidly increasing the probability of a rate cut from about 30% to 80%, and risk assets simultaneously stopped falling. Bitcoin formed a bullish hammer candlestick on the daily chart that day, indicating that the selling pressure had been completely absorbed, and the short-term trend model also showed signs of an upward reversal.

More statistically significant is the fact that the Thanksgiving-to-Christmas window has yielded an average return of 11.5% over the past 15 years, with gains recorded in 9 of them. In the short term, improved sentiment, enhanced derivatives structure, and historical seasonal returns all contribute to a higher probability of a phase of price increases for Bitcoin.

The rebound remains largely passive, driven by position adjustments rather than new funds.

Despite the emergence of reversal signals, the rebound was primarily driven by position clearing at the derivatives level. Leveraged short positions were forced to close as prices recovered, and the excessive demand for put protection in the options market subsided, causing implied volatility to fall rapidly and accelerating the adjustment of derivative positions.

However, Bitcoin remains within a wide downtrend channel, with the price yet to retest the key resistance level of $92,000, and trend indicators failing to show a structural bullish reversal. Historical experience suggests that when Bitcoin trades below its 21-week moving average, investors should adopt a defensive strategy rather than prematurely assuming a trend reversal.

Meanwhile, while selling pressure on ETFs has temporarily eased due to expectations of interest rate cuts, there have been no signs of sustained net inflows, nor have large-scale buying from new capital been observed. Overall, the current rally lacks the "incremental funds" needed for a trend-driven market and appears more like a technical correction of previously excessive pessimism.

Overall, Bitcoin is currently in a phase of "short-term strength but structural weakness." This rebound is supported by seasonality, a reversal in sentiment, and macroeconomic expectations, but its essence is still closer to a tactical correction than the restart of a structural bull market. In our baseline scenario, this strength is highly likely to continue until around the December 10th FOMC meeting. While expectations of interest rate cuts provide a temporary tailwind, the meeting's forward guidance could still bring new shocks. Investors need to be wary of misinterpreting a tactical rebound as a trend reversal. Until the price breaks through key resistance and the trend structure strengthens, a cautiously optimistic strategy remains the primary approach.

The above viewpoints are from Matrix on Target. Contact us to obtain the full Matrix on Target report.

Disclaimer: Investing in the market involves risks; please exercise caution. This article does not constitute investment advice. Digital asset trading can be extremely risky and volatile. Investment decisions should be made after careful consideration of your individual circumstances and consultation with a financial professional. Matrixport is not responsible for any investment decisions made based on the information provided in this content.