What to expect from the crypto market this week

We all are aware of the sudden crash in bitcoin price on Friday which affected atlcoins  as well and led to liquidation of a lot of leverage traders. 

This is not a new thing in the market as liquidity will always flow in or out of the digital assets like crypto which could either lead to a pump or dump. So today,  we shall be looking at some scenarios that could either lead to a possible bounce back or further dip in the market. 

What makes a retracement plausible

Here are some signals that support the possibility of a bounce or partial recovery in the near term:

After a sharp drop, markets often overshoot, causing asset prices to fall too far too fast. That can attract “dip buyers” who see value at lower levels.

In the recent move, Bitcoin apparently hit a key Fibonacci retracement zone (61.8 % of the prior leg) near $111,880 and displayed a bullish engulfing candle, suggesting some short-term support. 

The RSI (relative strength index) has moved into oversold territory in some timeframes, opening room for a technical reversal or mean reversion. 

If macro or sentiment pressures stabilize (e.g. trade tensions ease or rate cuts expectations reassert), that could help capital flow back into risk assets like crypto.

So those are the favorable technical / sentiment conditions that make a retracement possible.

What could limit or prevent a strong bounce

A retracement isn’t guaranteed. Below are headwinds or risks that could suppress any rebound:

Macro / policy risk — If the trade war escalation continues, or central banks signal further tightening, risk assets may remain under pressure.

Weak resistance zones — The bounce could stall quickly if it hits strong supply / resistance (areas where many sellers are waiting).

Momentum confirmation — For a strong bounce you often need confirmation (higher highs, volume pick-up). Without it, the bounce might be shallow or fade.

Sentiment spillover — Fear or capitulation may still be dominant; if more sell orders continue, they might overwhelm buyers.

Likely scenarios for this week

Here are two plausible paths:

Scenario What happens Key levels / triggers to watch

Moderate retracement / bounce Bitcoin could bounce ~5–15 % from recent lows, probing resistance zones around $114,000–$116,000. If it breaks above resistance convincingly (with volume), that increases odds of further recovery.

Choppy / failed rebound You get a weak or brief bounce that runs into resistance and then resumes downward. If resistance holds and momentum fails, price may retest or breach recent lows (say $108,000 or lower).

My tentative view (and probabilities)

Given what I see right now, I’d lean toward a modest retracement being more likely than a full reversal, but with a decent chance that it falters. I’d assign, say:

~ 40–50 % chance of a meaningful bounce (5–10 %)

~ 30–40 % chance of a weak bounce / consolidation

~ 20–30 % chance of further downside continuation