Bitcoin Rebound Trap: How to Buy and Short to Catch Opportunities

When Bitcoin rapidly rebounds from 64,000 to 66,000, the market cheers temporarily, but this is precisely the critical moment for short sellers to buy in. Many see the rebound and think the bottom has formed, unaware that this is exactly the scenario most anticipated by bears. How and when to buy determines whether you are fooled by the rebound or riding the trend for profit.

Rebound Does Not Equal Reversal: Identifying False Signals in a Downtrend

In a true downtrend, each rebound serves the same purpose: testing overhead resistance, confirming whether selling pressure has truly diminished, and attracting the last batch of hopeful buyers.

The movement from 64,000 to 66,000 perfectly verifies this. There is buying interest, but the strength is limited—price only pulls back 2,000 points before losing momentum. This kind of rebound is not the start of a reversal but a classic continuation pattern within a decline. Genuine bottom rebounds should show sustained buying pressure, but here we only see temporary defense.

For short sellers, this feeble rebound is an ideal signal. It indicates that bulls have exhausted their efforts and that there is still enough downside room before reaching their real strong resistance zone (68,000–70,000).

The Hidden Mechanism at 66,000: Why Shorting Here Is the Smartest Move

Smart shorting never involves rushing in during a sharp decline and getting stopped out by a rebound. Instead, it involves gradually entering during a weak rebound. The 66,000 level now meets three perfect entry conditions:

First, ample liquidity. After a short-term plunge, market sentiment temporarily improves, participation increases, and both buyers and sellers are active. This creates enough counterparty interest to avoid slippage when shorting.

Second, limited rebound height. A mere 2,000-point bounce indicates bulls are only defending, not attacking. If bulls truly had strength, they would push the price higher. This limitation reflects the bears’ power.

Third, sufficient tolerance for error. There’s still room before reaching the real resistance zone at 68,000–70,000. Even if the price bounces further, you have an exit point. Shorting here isn’t about catching the absolute bottom but about establishing positions at manageable risk levels.

Currently, Bitcoin stands at $67.71K, approaching a key resistance, further confirming the expectation that the rebound is losing steam.

How to Smartly Short: Timing and Position Management

Shorting isn’t about going all-in at once but about scaling in gradually. How to buy? That’s the real test.

First batch: Now, in the 66,000–67,500 range. Light positions to test the waters and gauge the market’s true reaction. If bulls are genuinely strong and push higher, your losses are limited. More likely, the price will be rejected here, giving you a second opportunity to add.

Second batch: If the rebound extends to 68,000, that’s the most comfortable short entry point. Bulls have exhausted their efforts at the strong resistance, and market sentiment begins to turn. This is the highest-probability shorting zone.

Third batch: Reserve for extreme scenarios—if the price surges to 70,000. Although unlikely, leaving some room for maneuver helps prevent being caught off guard by market overperformance.

The key is: don’t go all-in, don’t invest everything at once. Keep positions small, scale in multiple times, and let time and market dynamics work in your favor. How to short? Step by step, with each move being flexible.

Macro Factors Supporting a Bearish Outlook

Don’t forget several repeatedly validated facts underpin this view:

Wu Jihan has already exited, indicating that those truly knowledgeable about mining and Bitcoin are voting with their feet. Retail investors are still dollar-cost averaging, so the market isn’t cleared; the quality of buying interest is declining. Macro liquidity shows no signs of improvement, and global central bank policies remain tightening. Technically, this decline is likely to continue at least mid-term or even longer.

All these factors combined suggest that 66,000 is just a midpoint, not the destination. The real warning is against those telling you “double bottom confirmed” or “time to buy the dip”—these are often the last struggles of the last bagholders.

Short Selling Tactics: Patience and Discipline

The final key to successful shorting is mindset management. Keep small positions, avoid all-in bets. Hold on at least until the second half of the year, letting time work for you. Rebounds will occur, possibly multiple times, but as long as the fundamentals don’t reverse, the downtrend will persist.

Every rebound is a new shorting opportunity; every failure is a chance to readjust. How and when to buy depends on your understanding of the market structure. In front of 66,000, truly smart short sellers should already be taking action.