Bitcoin Bounce Fades, Q1 Losses Deepen, and New Price Risk Back in Focus
Bitcoin is buying and selling round $68,700, down almost 22% 12 months thus far and on tempo for its weakest first quarter since 2018. After beginning the 12 months close to $87,700, BTC has shed nearly $20,000 in just some weeks, placing strain on the broader crypto market.
While early-year weak point just isn’t uncommon for Bitcoin, the size of the decline has raised considerations that the present correction is probably not over but.
Worst First Quarter in 8 Years?
Historically, Bitcoin has posted a adverse first quarter in 7 of the previous 13 years.
However, a 22% drawdown would mark its worst Q1 efficiency for the reason that 2018 bear market, when BTC plunged almost 50% in the opening months of the 12 months.
January and February each closed in the crimson, growing the chance of a uncommon back-to-back adverse begin.
To meaningfully shift the narrative, Bitcoin would need to reclaim the $80,000 region, which at the moment seems distant given prevailing momentum.
That mentioned, historical past reveals that weak first quarters don’t essentially outline the total 12 months. In eight of the previous 13 years, Q2 delivered the alternative efficiency of Q1.
This retains the medium-term outlook extra nuanced than the headlines recommend.
9% Bounce May Have Increased Downside Risk
Between February 12 and February 15, Bitcoin staged a pointy 9% rebound. On the floor, the transfer appeared constructive. Underneath, leverage knowledge tells a unique story.
Open curiosity in BTC futures jumped from roughly $19.6 billion to $21.47 billion throughout the rebound, a rise of almost $1.9 billion.
Funding rates also turned strongly positive, signaling that merchants had been aggressively positioning for additional upside.
However, the broader chart construction nonetheless resembles a bear flag. The latest rally unfolded inside a downward continuation sample, and value is now drifting again towards the decrease boundary of that construction.
Momentum indicators add to the warning. A hidden bearish divergence fashioned on the 12-hour chart, with value making a decrease high whereas RSI printed the next high. This sample usually seems when sellers are quietly regaining management.
At the identical time, Bitcoin’s Net Unrealized Profit/Loss surged by roughly 90% over a number of days, indicating that many holders shortly returned to paper earnings.
Similar revenue spikes in early February preceded a 14% drop. If merchants rush to lock in positive factors once more, promoting strain may speed up.
Key Levels: $66K Support, $58K Downside Target
Technically, the $66,270 space is a crucial near-term assist. A confirmed breakdown beneath this zone would activate the bear flag continuation sample.
If that occurs, the subsequent main draw back goal sits close to $58,800, aligning with the 0.618 Fibonacci retracement and representing roughly a 14% decline from present ranges.
A deeper extension may deliver the $55,600 area into play.
On the upside, BTC must reclaim $70,840 to stabilize quick time period. A stronger breakout above $79,290 would invalidate the bearish construction and sign that consumers have regained management.
Bitcoin Dominance and Treasury Companies Offer Mixed Signals
Beyond value motion, broader market metrics paint a posh image. Bitcoin dominance stays elevated close to 58.5%, suggesting capital continues to favor BTC over altcoins throughout this correction. That relative power usually seems in defensive market phases.
Meanwhile, public Bitcoin treasuries proceed to carry substantial Bitcoin reserves. Data from BitcoinTreasuries reveals over 1.13 million BTC collectively held by public corporations, led by giant company holders.
The largest of those holders is Strategy, which holds 3.27% of the full Bitcoin provide. While this structural demand doesn’t stop short-term volatility, it reinforces Bitcoin’s long-term institutional footprint.
Bitcoin is caught between historic resilience and near-term technical weak point.
The 22% year-to-date drop places Q1 on monitor for an unenviable report.
Meanwhile, leverage, divergence alerts, and on-chain profit metrics suggest that downside risk towards $58,000 can’t be dominated out.
At the identical time, elevated dominance and continued company accumulation spotlight that the broader construction is below strain, however not but damaged.
The coming weeks will doubtless decide whether or not that is merely one other rotational part inside a bigger cycle or the beginning of a deeper corrective leg.
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