While price action has shaken confidence, both technical indicators and analyst commentary point to a familiar consolidation phase instead of a structural breakdown.

Short-term pain, familiar market pattern

According to crypto analyst Merlijn The Trader, major Bitcoin rallies historically begin with the same sequence: a brutal flush, damaged sentiment, and a quiet accumulation phase. His view is that the recent sell-off fits this script closely.

The idea is simple – weak hands exit during periods of fear, while longer-term capital gradually builds positions away from the spotlight. From that perspective, the current correction is not an anomaly, but a setup phase that has preceded previous upside expansions.

EVERY MAJOR BITCOIN RALLY BEGINS THE SAME WAY:

Brutal flush.
Broken confidence.
Quiet accumulation.

That’s when smart money steps in.

Pain builds the launchpad.

Bitcoin is following the script again. pic.twitter.com/fYa0GQLY73

— Merlijn The Trader (@MerlijnTrader) January 31, 2026

Merlijn’s thesis focuses less on timing an exact bottom and more on market psychology. He argues that rallies rarely start when optimism is high. Instead, they tend to emerge when confidence is broken and price stabilizes quietly, allowing so-called smart money to accumulate without chasing momentum.

Technical picture shows oversold conditions

On the technical side, momentum indicators support the idea that downside pressure may be losing steam. The Relative Strength Index (RSI) on the 4-hour chart has dipped into the low-30s, hovering near oversold territory. Historically, RSI readings in this zone often coincide with short-term exhaustion in selling pressure, especially when price begins to consolidate rather than accelerate lower.

The Moving Average Convergence Divergence (MACD) remains in negative territory, reflecting the ongoing corrective trend. However, the histogram shows signs of contraction, suggesting bearish momentum is weakening. While this does not confirm an immediate reversal, it does point to a slowing of downside acceleration, often a prerequisite for stabilization or a relief bounce.

Key support under the microscope

A more cautious but still constructive view comes from Michaël van de Poppe, who emphasizes that Bitcoin is holding a crucial support region. He notes that external factors could still influence price in the near term.

Source: Michael van de Poppe X

A deeper correction in gold could weigh on Bitcoin temporarily, given the recent correlation between risk assets and precious metals. At the same time, geopolitical shocks, such as escalating tensions involving Iran, could trigger sudden volatility spikes across global markets.

Despite these risks, van de Poppe suggests that as long as key support zones remain intact, the risk-reward profile favors looking for long positions rather than aggressively betting on further downside. His stance aligns with the broader idea that the current move is corrective, not trend-defining.

A market correcting, not collapsing

Taken together, the technical signals and analyst views point to a market digesting recent gains rather than entering a new bearish phase. Momentum has cooled, sentiment has weakened, but structural support levels are still holding.

For now, Bitcoin appears to be in a classic reset phase – uncomfortable in the moment, but potentially constructive for the short-term outlook if accumulation continues and selling pressure keeps fading.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

The post Bitcoin Holds Firm After Pullback as Short-Term Structure Stays Intact appeared first on Coindoo.

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Filed under: Bitcoin - @ January 31, 2026 1:12 pm