Bitcoin fell just over 1% in the last 24 hours, but the main focus is not on the daily movement. Over the weekend, the price of Bitcoin came very close to confirming a bearish structure, before showing a short-term recovery.
A technical signal had been forming for days, and on-chain data now shows that selling pressure is decreasing. Even so, significant risks remain. Whether Bitcoin will stabilize or retreat to $78,000 now depends on how the price of BTC reacts at decisive levels.
Reaction occurs as selling pressure diminishes near the decline zone
Bitcoin continues to trade within a double top pattern on the daily chart. This formation generally indicates a reversal of negative trend when losing the support line known as the neckline.
In the case of Bitcoin, this line is close to the region of $86,100. On January 25, BTC fell to this range before recovering. A clear daily close below this level would trigger a projected downward movement of about 10%.
The recovery, however, was supported by a relevant momentum signal.
Between December 18 and January 25, the price of Bitcoin formed a higher low, while the Relative Strength Index (RSI) showed a lower low. The RSI measures momentum by comparing recent gains to losses. When the price holds while the RSI weakens, this usually indicates a cooling of selling pressure. This hidden bullish divergence is often a sign of a short-term reaction, rather than a trend reversal.
On-chain data confirms this cooling of selling pressure.
The Spent Coins Age Band indicator, which tracks the amount of coins of all ages being moved on the network, showed a sharp drop. The transaction volume decreased from about 27,000 to nearly 7,690, a reduction of approximately 72%. Fewer coins in circulation generally indicate that few investors are selling. This scenario aligns with the RSI signal and helps explain why the price of Bitcoin rose instead of deepening the decline immediately.
However, the decrease in selling strength alone does not guarantee safety for this Bitcoin price forecast. This directly leads to the next risk level.
ETF outflows and unrealized profits indicate that the risk of decline persists
Although sellers are showing signs of exhaustion, buyers have not yet demonstrated significant strength.
Spot Bitcoin ETFs have recorded daily net outflows for several consecutive sessions. Constant outflows suggest weak institutional demand. Historically, recoveries without ETF support tend to lose strength, rather than evolve into consistent rallies.
The profit dynamics also remain unfavorable.
The Net Unrealized Profit/Loss (NUPL) indicator measures the potential profit or loss of investors, on average. Higher scores indicate that more investors are in profit and may decide to sell. Bitcoin's NUPL is currently around 0.35, still well above the capitulation zone.
Previous local lows occurred when the NUPL approached the ranges of 0.33–0.34, especially at the end of November and in mid-December. As the NUPL is still above these marks, it indicates that there may be more profit-taking pressure before the market finds a stable base.
The crypto analysis company Alphractal also highlights concerns about BTC's NUPL:
In summary, selling pressure may be losing strength, but it has not ceased. Thus, the next resistance zones gain special importance.
Base cost walls explain the price forecast for Bitcoin
To understand how far this price recovery movement of BTC can go, average cost data provides greater clarity.
A heat map of the average cost shows the price levels where large amounts of Bitcoin were previously acquired. These zones often act as resistance, as investors tend to sell when the BTC price returns to its breakeven point.
The main barrier is located between $90,168 and $90,591, with a strong concentration around $90,550, a level highlighted on the price chart. This is the first relevant obstacle that the recovery needs to overcome.
If Bitcoin exceeds $90,550, the next critical level is $91,210. Recovering this level would break the right shoulder of the head and shoulders pattern (previously highlighted) and significantly weaken the bearish scenario.
However, the broader structure only becomes neutral if Bitcoin manages to surpass the region of $97,930. Until then, the pattern remains in a vulnerable situation.
On the downside, the risk of decline in the Bitcoin price projection remains evident. A daily close below the $86,100–$85,900 range would confirm the loss of support and open the way to $78,000, in line with the complete negative projection of the pattern. This represents a decline of 10% from the neckline and over 11% from the current BTC level.
The article Bitcoin price forecast still warns of the risk of $78,000 was first seen on BeInCrypto Brazil.
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