Bitcoin Momentum Shows Early Signs of Recovery as Oversold Conditions Ease
It has been a pivotal week for Bitcoin’s momentum structure. After reaching record-high oversold readings, one of the market’s key momentum gauges has finally begun to turn lower — a potential early signal that selling pressure is easing. Over the past three days, bearish momentum has dropped sharply, suggesting that the market may be preparing to exit extreme conditions if this pace continues.
Historically, such reversals tend to occur within two weeks of reaching peak oversold levels. The current shift, therefore, aligns neatly with prior market behaviour — implying that on-chain activity and network demand are gradually improving, helping to stabilize sentiment across Bitcoin and other major assets.
The main question for December is whether Bitcoin will first register a new marginal low below $81,000 before a lasting rebound begins. In past cycles, a brief lower low has often accompanied the final stage of capitulation. Whether that repeats now will likely define the tone for the rest of the year.
Encouragingly, several top cryptocurrencies are also beginning to show improvement in underlying momentum metrics. Ethereum appears to be recovering from its weakest readings, while Aave is displaying stronger on-chain signals relative to recent weeks.
One of the standout performers in the current environment has been 1inch, following the announcement of its upcoming Aqua protocol — a shared-liquidity layer designed to let multiple DeFi strategies operate from the same capital base. Although the full rollout isn’t expected until Q1 2026, early developer activity and rising on-chain engagement seem to be supporting its market strength.
Bottom line: Oversold conditions across Bitcoin and major altcoins are finally showing signs of relief. Whether this marks the start of a sustainable recovery will depend on how prices behave if Bitcoin retests the $81,000 area — a level that could either complete the capitulation phase or define a deeper correction.