Bitcoin (BTC) rose 8% on Wednesday to trade above $73,000, a level that has thwarted all attempts at recovery over the past three weeks. Analyst reveals why Bitcoin must hold $70,000 to ensure recovery.
Important points:
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For a sustained breakout in BTC price, profit-taking on the rally to $70,000 will need to cool down.
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Bitcoin needs to hold support between $68,000 and $70,000 to confirm a recovery.
Profit-taking needs to be absorbed through strong buying.
After six consecutive weeks of closes in the red, Bitcoin has finally broken out of the $64,000 to $70,000 range that defined its price action over the past three weeks.
Glassnode highlights that Bitcoin’s struggle to break above $70,000 is a sign of intense profit-taking as realized gains have repeatedly spiked around this level.
Related: Bitcoin still due for ‘next leg’ as $73,000 BTC price ahead of death cross
The chart below shows that every time the 12-hour SMA of the net realized profit/loss indicator spiked above $5 million per hour, the price stalled and reversed to highs in the $69,400 range.
As seen on Tuesday, February 19th, February 25th, the region continues to be restricted from any recovery attempts.
This absorbs upward momentum in an illiquid environment and “reflects the fragility of the current demand structure,” the on-chain data analytics firm said.
For BTC to remain above $70,000, “it needs to absorb the level of profit-taking without triggering a rejection,” Glasnod added.
Meanwhile, private wealth manager Swissbloc said the Bitcoin Risk Index is calming down after nearly 30 days of “extreme risk” at 100.
This shift to lower risk could trigger a bull market rally and keep Bitcoin above $70,000.
“Although still elevated for now, a return to a lower-risk environment could trigger another bullish leg, with an initial target of $83,000 and a possible extension to $110,000.”
As reported by Cointelegraph, compressing volatility, strengthening ETF flows, and decreasing Coinbase discounts suggest that Bitcoin’s downward trend is slowing, increasing the likelihood of a short-term rebound.
Bitcoin price needs to hold $70,000 as support
Bitcoin has rebounded 21% from multi-year lows below $60,000, and the price has regained key support levels, including the 200-day exponential moving average (SMA) at $68,000 and the psychological $70,000 level.
“For a long-term rally from this point, Bitcoin will need to reclaim the EMA as support on the weekly time frame,” analyst Recto Capital said in a recent X post, adding:
“Until proven otherwise, the EMA will act as a force of resistance.”
Fellow analyst Ted Pillows said on Wednesday’s XPost that a daily candlestick close above $70,000 “would be good for the market,” adding:
“If Bitcoin fails to sustain above the $70,000 zone, we expect the $65,000 to $66,000 support zone to be retested.”
Glassnode’s short-term holders (STH) cost-based distribution heatmap reveals the largest cluster below $70,000, with investors acquiring approximately 230,000 BTC over the past month.
Sustaining above the STH supply cluster is a key precondition for regaining momentum towards a definitive breakout.
As reported by Cointelegraph, a break above the symmetrical triangle resistance line at $70,000 would increase the chances of a sustained rally towards $75,000 by the end of the month.
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