A sucker's rally? Why Bitcoin analysts say BTC price must hold $70K

[kim]

Bitcoin
BTCUSD.
bitcoin rose 8% on Wednesday, trading above $73,000, a level that has halted every recovery attempt over the past three weeks. Analysts explain why Bitcoin needs to maintain the $70,000 level to ensure a sustained recovery.

Key takeaways:

Profit-taking on rallies must subside for the BTC price to achieve a sustained breakout, with current gains reaching $70,000.

Bitcoin needs to maintain its support level between $68,000 and $70,000 to confirm its recovery.

Profit-taking should be offset by strong buying activity

After six consecutive weeks of closing in the red, Bitcoin has finally broken above the $64,000-$70,000 range, which has characterized its price movements over the past three weeks.

Glassnode points out that Bitcoin's inability to surpass the $70,000 mark was due to repeated surges in realized profits around that level, indicating significant profit-taking activity.

The chart below illustrates that whenever the 12-hour Simple Moving Average (SMA) of the net realized profit-and-loss metric exceeded $5 million per hour, the price stalled and reversed direction, reaching a high in the $69,400 range.

This region continues to stifle every attempt at recovery, as evidenced by the events of February 19th, February 25th, and Tuesday.

This absorbs the upward momentum in a market with thin liquidity, "reflecting the fragility of the current demand structure," the on-chain data analytics company stated.

For the price of BTC to stay above $70,000, "the level of profit-taking needs to be absorbed without causing a price rejection," Glassnode added.

Meanwhile, the private wealth manager Swissblock stated that after nearly 30 days of "extreme risk" at a level of 100, the Bitcoin risk index is showing signs of cooling down.

This shift towards lower risk could trigger a bullish rally, allowing Bitcoin to remain above $70,000.

"Although the reading remains elevated for the time being, a return to a low-risk environment could trigger the next upward trend, with initial targets at $83,000 and a potential extension towards $110,000."

As Cointelegraph reported, compressed volatility, increased ETF inflows, and a smaller discount for Coinbase shares suggested that Bitcoin's downward trend is slowing, increasing the likelihood of a short-term recovery.

Bitcoin's price needs to maintain the $70,000 level as support

Bitcoin has recovered 21% from its multi-year lows below $60,000, allowing its price to reclaim key support levels, including the 200-day exponential moving average (SMA) at $68,000 and the psychologically significant $70,000 level.

"For any sustained upward movement from this point, Bitcoin would need to regain the EMA level as support," analyst Rekt Capital stated in a recent post on X, adding:

"Until proven otherwise, the EMA is acting as a resistance level."

"A daily candlestick close above $70,000 would be good for the markets," fellow analyst Ted Pillows said in an X post on Wednesday, adding:

"If Bitcoin fails to maintain a price above the $70,000 level, expect a retest of the $65,000-$66,000 support range."

Glassnode's short-term holder (STH) cost-basis distribution heatmap reveals the largest concentration of investors below $70,000, where they acquired approximately 230,000 BTC over the past month.

Maintaining a position above the support and resistance levels is a crucial prerequisite for regaining momentum and achieving a significant upward breakout.

As Cointelegraph reported, breaking above the resistance line of the symmetrical triangle at $70,000 would strengthen the likelihood of a sustained upward movement towards $75,000 before the end of the month.
source: ㅠhttps://www.tradingview.com/news/cointelegraph:d8cae7d28094b:0-a-sucker's-rally-why-bitcoin-analysts-say-btc-price-must-hold-70k/