Bitcoin (BTC) surged 8% on Wednesday above $73,000, a level that has stalled every recovery attempt in the past three weeks. Analysts Reveal Why Bitcoin Needs $70,000 to Recover
Key considerations:
-
Profit taking from rallies to $70,000 should cool for a sustained breakout in BTC price.
-
Bitcoin needs to find support at $68,000 – $70,000 to confirm a recovery.
Profit taking should be absorbed by strong buying
After closing its sixth straight week in the red, Bitcoin finally broke above the $64,000-$70,000 range that has defined its price action for the past three weeks.
Glassnode points out that Bitcoin’s struggle to break above $70,000 was due to repeated increases in realized profits near this level, which points to excessive profit taking.
related to: Bitcoin still has to “go down the next leg” as the price of $73K BTC is before the death knell
The chart below shows that every time the 12-hour SMA measure of net realized profit and loss exceeded $5 million per hour, the price stopped and returned to the high of $69,400.
Recovery efforts are ongoing in the area, as seen on February 19, February 25 and Tuesday.
Analyst firm onchain said that this rate of increase is absorbed in a thin liquidity environment, which “reflects the volatility of the demand structure”.
For BTC to stay above $70,000, “profit-taking levels must be absorbed without rejection,” Glassnode added.
Meanwhile, private equity manager Swissblock said that after nearly 30 days of “extreme risk” at 100, Bitcoin’s risk index is cooling.
This shift to lower risk could trigger an upward rally and allow Bitcoin to stay above $70,000.
“Although it remains bullish for now, a return to a risk-free environment could fuel the next leg of the upside with initial targets of $83K and a possible extension to $110K.”
As Cointelegraph reported, compressed volatility, strengthening ETF flows, and Coinbase’s reduced discount suggest that Bitcoin’s downtrend is slowing, raising the possibility of a short-term pullback.
Bitcoin price should have $70,000 as support
Bitcoin’s 21% recovery from its multi-year lows below $60,000 has seen its price recover key support levels, including the 200-day exponential moving average (SMA) at $68,000 and the psychological level of $70,000.
“For any long-term upside from this point, Bitcoin needs to reestablish the EMA as support,” analyst Rekt Capital said in a recent X post.
“Until proven otherwise, the EMA will act as a countermeasure.”
A daily analyst close to $70,000 “will be good for the markets,” fellow analyst X said 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 (STH) short-term distribution heatmap shows the largest cluster below $70,000, with investors gaining around 230,000 BTC over the past month.
Keeping on top of the STH supply clusters is the key to speed recovery for a permanent failure.
As Cointelegraph reported, a break above the symmetrical triangle resistance line at $70,000 will strengthen the case for a sustained push to $75,000 by the end of the month.
This article does not contain investment advice or recommendations. Every investment and business move involves risk, and readers should do 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 shall not be liable for any loss or damage arising from your reliance on this information.
