Bitcoin rebounded to as high as $66,921 but slipped back into the $63,000 range, raising caution that the rise is closer to a bull trap than a trend reversal.

On July 28, Decrypt reported that bitcoin fell as low as $62,684 early in the session and tried to rebound, but failed to reverse the move.

The broader crypto market also weakened. Bitcoin at one point fell 2.7 percent to around $63,400. Ether dropped 4.2 percent to $1,875 and Solana fell 4.4 percent to $73. More than $670 million in liquidations occurred across the crypto market over the past 24 hours, with $533 million concentrated in long positions. Funds that had bet on a renewed rise were unwound all at once.

Risk-off sentiment spread first from a sharp plunge in South Korean stocks. The KOSPI fell more than 8 percent shortly after the open, triggering a circuit breaker, and the shock spread to global markets. Before Wall Street opened, Nasdaq futures fell on weakness in memory chip stocks, while oil and gold fell 2 percent and 1 percent, respectively. Cryptocurrencies posted larger declines in that risk-off market.

Market participants are cutting leverage exposure ahead of the Federal Open Market Committee meeting. A dominant view is that the Federal Reserve will hold the policy rate at 3.50 to 3.75 percent, but a news conference scheduled for July 29 by Fed Chair Kevin Warsh (케빈 워시) is seen as a variable. At the June news conference, Warsh was interpreted as hawkish, pushing the implied chance of a rate hike up to 70 percent, and the 2-year Treasury yield also jumped 16 basis points.

Technical trends are also putting more weight on the chance of another drop than on the sustainability of the rebound. On the daily chart, bitcoin has been trading for months below the 200-day exponential moving average and below key cloud bands. Even when a weekly rebound appears, it has repeatedly been blocked quickly by selling, and the assessment is that this week is following the same pattern.

More detailed indicators also tilted bearish. A so-called dead cross, in which the 50-day exponential moving average sits below the 200-day line and prices move under both, has continued for months. The relative strength index stood at 46.5, staying below 50. It is not in oversold territory, but it does not show clear buying momentum. The squeeze momentum indicator has also been active for 9 consecutive candles, but upside strength remained at around 0.25.

Market sentiment is also skewed to the downside. On the prediction market Myriad, operated by Dastan, bets are being placed on whether bitcoin will reach $84,000 or $55,000 first, and 65.7 percent of traders are wagering that it will hit $55,000 first. The chance of breaking through $84,000 first stood at 34.3 percent. Sentiment was almost the opposite in March, but the market has been pricing bitcoin downside risks back in over the past few months.

Still, the upside scenario has not disappeared completely. If Warsh signals a more dovish stance than expected after this meeting and stresses patience over rate hikes, there is room for a short squeeze to flow in over the short term. In that case, bitcoin could retest the $65,302 Fibonacci level. A resumption of U.S. Senate discussions on the "Clarity bill" could also be a positive factor on the regulatory front.

Based on the current chart alone, the prevailing view is that the rebound is limited in nature. Without strong support from external variables, the next direction indicated by current signals is seen by the market as closer to a drop than a rise.