Bitcoin (BTC) is up 8% on Wednesday to trade above $73,000, a level that has stopped every recovery attempt over the last three weeks. Analysts reveal why Bitcoin must hold $70,000 to secure the recovery.
Key takeaways:
Profit-taking on rallies to $70,000 must cool down for a sustained breakout in BTC price.
Bitcoin must hold support at $68,000 -$70,000 to confirm the recovery.
Profit-taking must be absorbed with strong buying
After a sixth straight weekly close in the red, Bitcoin has finally broken above the $64,000-$70,000 range, which has defined its price action over the last three weeks.
Glassnode highlights that Bitcoin’s struggle to break above $70,000 was due to repeated spikes in realized profit near this level, signaling heavy profit-taking.
Related: Bitcoin still due ‘next leg down’ as $73K BTC price precedes death cross
The chart below shows that each time the 12-hour SMA of the net realized profit-and-loss metric spiked above $5 million per hour, the price stalled and reversed at the $69,400 range high.
This region continues to cap every recovery attempt, as seen on Feb. 19, Feb. 25, and Tuesday.
This absorbs upward momentum in a thin liquidity environment, “reflecting the fragility of the current demand structure,” the onchain data analytics company said.
For BTC to remain above $70,000, the “level of profit-taking has to be absorbed without triggering rejection,” Glassnode added.
Meanwhile, private wealth manager Swissblock said that after nearly 30 days of “extreme risk” at 100, the Bitcoin risk index is cooling down.
This shift towards low risk could spark a bullish rally, enabling Bitcoin to stay above $70,000.
“While it remains at an elevated reading for now, a return to a low-risk environment could catalyze the next bullish leg, with initial targets at $83K and a potential extension toward $110K.”
As Cointelegraph reported, compressed volatility, strengthening ETF flows and a diminished Coinbase discount suggested Bitcoin’s downtrend is slowing, raising the chances of a short-term rebound.
Bitcoin price must hold $70,000 as support
Bitcoin’s 21% recovery from its multi-year lows below $60,000 has seen its price reclaim key support levels, including the 200-day exponential moving average (SMA) at $68,000 and the psychological $70,000 level.
“For any prolonged upside from this point, Bitcoin would need to reclaim the EMA as support” in the weekly time frame, analyst Rekt Capital said in a recent X post, adding:
“Until proven otherwise, the EMA is acting as a resistance.”
A daily candlestick close above $70,000 “would be good for markets,” fellow analyst Ted Pillows said in an X post on Wednesday, adding:
“If Bitcoin fails to hold above the $70,000 zone, expect a retest of the $65,000-$66,000 support zone.”
Glassnode’s short-term holder (STH) cost-basis distribution heatmap reveals the biggest cluster below $70,000, where investors acquired about 230,000 BTC over the past month.
Holding above the STH supply clusters is a key prerequisite for regaining momentum for a decisive breakout.
As Cointelegraph reported, breaking above the symmetrical triangle’s resistance line at $70,000 would strengthen the case for a sustained push towards $75,000 before the end of the month.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
