Bitcoin market sentiment is changing – Is the price heading towards a breakout or a fakeout?

The overall market index of Bitcoin (BCMI) has sharply risen again, with the 7-day moving average (SMA) increasing to about 0.6 — an early signal suggesting that market sentiment may be shifting to a cautiously optimistic state.

This recovery comes amidst a slowdown in profit-taking activities and an improvement in core on-chain indicators. Of course, the long-term outlook remains quite cautious.

The 90-day SMA remains stable around 0.45, indicating that the market is still in a neutral state, far from entering the overheating zone.

Currently, with profit-taking and on-chain fundamental factors gradually stabilizing, the question arises whether this rebound is sustainable — or just the next fakeout (?

![])https://img.gateio.im/social/moments-43c482e1bbd1d695e8faac7979be88a6(The overall market index of Bitcoin | Source: CryptoQuant## C****Bitcoin's NVT indicators rise to the sky reflect the process of re-evaluating value

The NVT Golden Cross index has sharply decreased by 78.68% to 0.29 — a significant change indicating that the market may have moved away from its local peak.

At the same time, the standard NVT ratio also decreased by 13.1% to 27.37, meaning that the trading volume is rising relatively compared to the market capitalization.

These declines reinforce the view that the market is undergoing a revaluation process and indicate that network activity is naturally improving. Therefore, even though prices are still low, the underlying fundamental value is strengthening.

This makes the upward trend of the BCMI index less "virtual" and more grounded based on improved fundamental factors.

![])https://img.gateio.im/social/moments-64db02e317d8606a55a43ddda0434e34(Golden cross NVT of Bitcoin | Source: CryptoQuant## Light accumulation activity in the context of low market confidence

The total Bitcoin reserves on exchanges have decreased by 1.36%, down to $263.45 billion, indicating a small amount of Bitcoin has been withdrawn. Historically, a decrease in reserves often corresponds to accumulation, as coins are moved off exchanges for long-term storage.

However, the scale of the outflow remains modest, meaning that market confidence is still low. This once again aligns with the sluggish trend of the 90-day SMA of the BCMI index.

Therefore, although the accumulation process may be starting, it is occurring cautiously. To confirm a stronger recovery phase, the reserves on the exchange need to decline more significantly.

!)[bitcoin]https://img.gateio.im/social/moments-16b464639e16c02cc1b12a4c84db6a2b(BTC reserves on the exchange | Source: CryptoQuant## The dominance of short positions may cause strong volatility if market sentiment changes

As of May 29, the Long/Short ratio has decreased to 0.886, with Short positions accounting for 53.01% of the total — indicating that traders are still leaning towards a bearish trend, although market sentiment signals are improving.

When short positions dominate in such a context, the risk of a Short Squeeze occurring will rise if the price suddenly rises to the sky.

Therefore, although the recovery momentum of the BCMI index reflects a more positive sentiment, the current market structure leaning towards Short may increase volatility in both directions.

If the buyers regain control, this squeeze will push the price of Bitcoin above the $110,000 mark rapidly.

!)[bitcoin]https://img.gateio.im/social/moments-2c6131b8a3bd7416e6e9a0f0afcc18b5(Long/Short BTC Ratio | Source: CoinGlass## C****h BCMI index recovery will support Bitcoin price**?**

The strong rise in the BCMI index over the past 7 days, combined with the improvement in NVT ratios and moderate outflows from exchanges, indicates initial signs of accumulation.

However, long-term indicators remain stable and the Short position still dominates, implying that the market is still cautious.

A sustainable recovery may be forming, but this signal still needs to be confirmed with stronger accumulation activity and clearer price momentum.

Minh Anh