Bitcoin price has lost over 11% since the end of January. The price has reached a key technical target, but data from blockchain and derivatives markets shows that the market may not be finished with the decline.
Buyers are still cautious. Major players are reducing their exposure. Now many are wondering if this is the bottom, or just a stop on the way down.
Bitcoin reached its target after failed pattern
Bitcoin's recent decline followed a clear technical plan.
In late January, the price broke below a head-and-shoulders pattern, confirming a negative reversal. The decline on January 29 showed a target level near $75,130. In early February, Bitcoin reached this area, confirming the pattern almost exactly.
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Since January 31, Bitcoin has corrected by almost 11%, dropping from its local peak to the $75,000 area. This movement caused numerous forced liquidations and depressed the entire crypto market.
Reaching a downside target may provide short-term relief, but it does not mean the bottom is secured. Whether the level holds will depend on how buyers react after the technical damage.
So far, the response has been weak.
Spot buyers are still missing at key support levels
One of the biggest warning signs is that few buyers are accumulating when the price is close to $75,000.
Exchange outflows, which show how much Bitcoin is being moved into long-term storage, have declined sharply. Around January 31, outflows were around 42,400 BTC. After the decline, they fell to around 14,100 BTC, a decrease of almost 67%.
This shows that investors are not rushing to buy the dip. It is the first warning sign.
The behavior of large investors is the second warning sign. Wallets holding between 10,000 and 100,000 BTC have been reducing their holdings since February 1. Their total holdings decreased from around 2.21 million BTC to 2.20 million BTC. This corresponds to around 10,000 BTC being sold, worth around $750 million at current prices.
The NUPL for short-term holders (Net Unrealized Profit/Loss), which shows whether new buyers are making a profit or a loss, is the third warning sign. NUPL is now around -0.23, which puts many in the surrender zone. In November, NUPL bottomed at -0.27 before a strong rally began. This shows that the panic is there, but is not as extreme as last time, which could mean that the bottom is delayed.
Together, reduced outflows, large investor selling, and incomplete capitulation indicate that conviction is weak.
Derivatives show large share of short positions, not strong demand
Buyers in the spot market are cautious, therefore the derivatives market has become the main source of possible upside.
Liquidation data from Binance shows that the aggregate short selling volume is around $1.91 billion, while long positions have decreased to around $168 million, creating a large imbalance in favor of bearish positions.
When many are betting on a decline, even small increases can force sellers to buy back in. If Bitcoin rises, short sellers are pressured to close their positions, which can create rapid rebounds. This provides the opportunity for a short squeeze.
However, this is not the same as healthy demand. A rally driven by liquidations often fades unless supported by real buying. Without stronger spot buying and activity from larger investors, the rally may well be temporary. This is because when a potential short squeeze pushes prices up, more long positions are opened, keeping the downside risks alive.
Right now, derivatives provide volatility, but not stability. The BTC price actually needs demand in the spot market, something that is currently lacking.
Key Bitcoin Levels Point to $69,000 and Lower Risk Zones
If Bitcoin fails to hold its current support level, on-chain and technical models show clear targets for downward movements.
The UTXO Realized Price Distribution (URPD) shows where the existing Bitcoin supply was last purchased. These clusters often act as support during downturns.
The strongest nearby URPD cluster is near $66,890, where approximately 0.95% of the supply is concentrated.
Below that, there is another major cluster near $63,111, with around 1.14% of supply. These zones could attract buyers if the price continues to decline. It is the strongest current on-chain support for BTC.
From a technical perspective, a drop below $75,630-$75,130 opens the way to $69,500. If that level is lost, Bitcoin could end up in the $66,000-$63,000 range, which are important cluster zones. In the event of a larger drop, support near $61,840 will be important. Therefore, $69,500 will be the crucial decision zone if $BTC drops below $75,130.
On the upside, recovery attempts are facing resistance at $79,890 and $84,140. The price needs to remain above $84,140 to re-establish a positive trend. Until then, downside risks dominate.