Bitcoin Rallies Near $65,000, But Technicals Suggest a 'Dead Cat Bounce'

Bitcoin (BTC) has staged a recovery to trade near the $65,000 mark, but a closer look at technical indicators suggests the rally may be a temporary 'dead cat bounce' rather than the start of a sustained uptrend, according to an analysis by Investing.com.

While short-term charts show buy signals, they are clashing with deeply bearish readings on longer timeframes, a classic pattern that often traps optimistic investors in a broader bear market.

Conflicting Signals Flash Warning

The primary concern for market analysts is a sharp divergence in technical signals across different time horizons. As of early trading on August 18, Bitcoin was priced at $64,320. While hourly and daily charts registered 'Buy' or 'Strong Buy' signals, the more influential weekly and monthly charts continued to read 'Sell' and 'Strong Sell,' respectively.

In technical analysis, signals on higher timeframes are typically given more weight, suggesting the underlying market structure remains weak. This divergence indicates that the recent price strength could be a short-lived rally within a larger, more dominant downtrend.

Key Indicators Point to Weakness

Several key metrics underscore the bearish long-term outlook, despite the recent price bounce. Analysts are closely watching the following data points:

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• Weekly MACD: The Moving Average Convergence Divergence, a key momentum indicator, shows a deeply negative reading of -5,570.7, signaling that significant bearish momentum persists.
• Daily Stochastic: This oscillator, which measures momentum, has reached 96.6, an 'overbought' level. This suggests the short-term rally may be running out of steam.
• Trend Strength: The Average Directional Index (ADX) is below 21 on both daily and weekly charts, indicating a weak and directionless market, not a strong, trending recovery.

For a genuine rebound to be confirmed, analysts note that Bitcoin would need to decisively break above key resistance at $66,603. A failure to surpass the first major resistance level at $64,858 would lend further credibility to the dead cat bounce theory.

Market Context and Institutional View

The recent price action occurs within a larger bearish context. Bitcoin remains down 26.69% year-to-date and has fallen 44.75% over the past year, according to the report. This performance highlights a structural breakdown rather than a healthy market correction.

One conflicting data point comes from institutional positioning. In the second quarter of 2026, UBS reportedly increased its call option exposure in the iShares Bitcoin Trust 24-fold while cutting its put option exposure by 53%. While this signals bullish sentiment from at least one major institution, such positions can often be established months ahead of a potential market turn.