One Bitcoin Chart Correctly Predicts the 5% Bounce — But 3 Metrics Now Question It
The Bitcoin worth noticed a short-term rebound after slipping to latest lows, gaining almost 5% from its late-January backside to check the $76,980 zone. This BTC worth transfer adopted a bullish momentum setup on the 4-hour chart, the place promoting stress appeared to weaken.
At first look, the BTC rebound seemed technically justified. A well-known short-term sample had performed out earlier than. But a better take a look at on-chain and market construction information exhibits that three main metrics at the moment are questioning whether or not this bounce can develop right into a sustained restoration.
Chart Setup That Pointed to a 5% Bounce
On the 4-hour timeframe, Bitcoin formed a bullish divergence between January 31 and February 3.
During this era, the worth of BTC made a decrease low, whereas the Relative Strength Index (RSI), a momentum indicator, shaped the next low. This sample typically seems when promoting stress begins fading and short-term rebounds, albeit on a shorter timeframe, change into possible.
The same divergence appeared earlier between January 20 and January 30. That setup led to a rally towards $84,640 earlier than sellers took management once more.
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This time, the sample produced a rebound of almost 5%, lifting Bitcoin toward $76,980. The transfer adopted the similar technical script as earlier than, reinforcing the concept that the bounce was structurally legitimate.
The BTC worth bounce additionally had macro backing, as talked about by Martin Gaspar, Senior Crypto Market Strategist at FalconX. He attributed the transfer to a rotation from precious metals, proper earlier than the divergence flashed:
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“Given Friday’s blow-off high in metals, merchants could also be anticipating a rotation again to crypto. While BTC had beforehand been seen as a beneficiary of power in gold, capital which will have flowed to crypto off such strikes as an alternative funneled to silver in latest months. This might revert as silver cools off,” he mentioned.
But technical setups solely work when patrons proceed supporting them. And that is the place the first main problem seems.
Metric One — URPD Shows Strong Sell Walls at Key BTC Levels
The first metric questioning the rebound is the UTXO Realized Price Distribution (URPD), which maps the place giant parts of Bitcoin’s provide final moved.
URPD information exhibits that the space close to $76,990 comprises round 0.46% of the whole provide. This makes it a notable provide cluster, the place many holders are sitting close to their break-even ranges. That explains why the latest 5% bounce stalled at $76,980.
When worth approaches these zones, promoting stress typically will increase as traders look to exit with out losses.
This sample has already appeared as soon as earlier than.
The earlier BTC rebound in late January (talked about earlier) stalled close to $84,640, near the URPD zone, displaying a large 3.05% provide cluster. That wall proved too sturdy to interrupt.
Now, the newest rebound has as soon as once more stopped close to one other supply-heavy zone. This means that rebounds are being capped by holders, probably promoting into resistance relatively than constructing new positions. Without sufficient recent demand, these promote partitions stay tough to clear.
Rising Exchange Reserves and Weak SOPR Show Low Conviction
The second and third metrics come from trade flows and revenue habits, and collectively they paint a regarding image.
Bitcoin trade reserves hit a latest low of two.718 million BTC on January 19. Since then, reserves have climbed to about 2.752 million BTC.
That is a rise of roughly 34,000 BTC, or round 1.2% in lower than three weeks.
Instead of cash leaving exchanges for long-term holding, extra Bitcoin is now being moved again onto buying and selling platforms. This normally displays rising readiness to promote relatively than accumulate.
At the similar time, the Spent Output Profit Ratio (SOPR) is hovering close to yearly lows. SOPR measures whether or not cash are being offered at a revenue or a loss. A price beneath 1 means traders are realizing losses.
In late January, SOPR dropped near 0.94. It at the moment sits close to 0.97, nonetheless beneath the impartial degree. This means many holders are promoting even when they’re underwater.
When rising trade reserves mix with low SOPR, it alerts defensive habits. Investors are utilizing rebounds to exit positions as an alternative of constructing long-term publicity.
This weakens the basis of any restoration except a significant catalyst seems. Martin Gaspar from FalconX, nonetheless, hints at one sentiment-driven catalyst tied to regulatory readability that may attempt to change the BTC worth outlook:
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“In the weeks ahead, major catalysts will embrace any developments on the crypto market construction invoice, with key teams set to fulfill at the White House this week to debate the invoice,” he highlighted.
But the worth ranges nonetheless maintain the key!
Bitcoin Price Levels and Smart Money Show the Rebound Is Losing Support
The Bitcoin price action confirms what the three metrics are suggesting. For Bitcoin to regain momentum, a number of ranges should be cleared:
- $76,980: Immediate resistance from the present provide cluster
- $79,360: Next short-term barrier
- $84,640: Major long-term resistance tied to the largest BTC URPD zone
A sustained restoration requires clear 4-hour closes above these ranges, particularly above $84,640. So far, the BTC worth has failed to determine power above the first barrier.
The Smart Money Index provides one other layer of warning. This indicator tracks institutional-style positioning. On the 4-hour chart, it has been trending beneath its sign line since late January. This exhibits that bigger gamers are usually not rising publicity alongside the rebound.
The final time the index briefly crossed above its sign line in late January, Bitcoin rallied about 5%. That affirmation is at the moment lacking. Without renewed sensible cash participation, each short-term BTC rebound may fade.
Also, if the elevated panic-driven promoting, as highlighted by a falling SOPR, pushes the BTC worth down, $72,920 turns into a key zone. New draw back targets can come into play if a 4-hour candle closes beneath it.
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