The price of Bitcoin has experienced one of its sharpest declines in months, losing over 11% of its value from the late January peak. Although the price has reached a significant technical target, blockchain and derivatives data suggest that the market correction may not be over.
As buyers remain cautious and whale investors reduce exposure, the question is: is this the bottom, or a stop on the way lower?
Bitcoin reached the breakdown target after the pattern failure
Bitcoin's recent decline followed a clear technical path.
At the end of January, the price dropped below the head-and-shoulders pattern, confirming a bearish reversal. The breakout on January 29 set a downside target of about $75,130. In early February, Bitcoin reached this area, nearly perfectly confirming the pattern.
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Since January 31, Bitcoin has corrected nearly 11%, dropping from its local peak near $75,000. This move led to widespread liquidations and weighed down the entire crypto market.
Reaching the downside target brings temporary relief. However, it does not guarantee a sustainable bottom. The level's durability depends on how buyers react after the technical damage.
So far, the reaction has been muted.
Spot buyers are still lacking at key support levels.
One of the biggest warning signs is the lack of strong accumulation near $75,000.
Exchange withdrawals that measure the amount of Bitcoin being transferred to long-term storage have fallen sharply. On January 31, withdrawals were around 42,400 BTC. After the selling wave, they dropped to about 14,100 BTC, or nearly 67%.
This indicates that investors are not rushing to buy on the dip. It is the first warning indicator.
Whale investors' actions increase concern as a second warning indicator. Wallets holding 10,000–100,000 BTC have reduced their exposure since February 1. Their total ownership fell from about 2.21 million BTC to 2.20 million BTC. This represents a sale of approximately 10,000 BTC, worth about 750 million dollars at current prices.
Short-term holders' NUPL (Net Unrealized Profit/Loss), which indicates whether recent buyers are in profit or loss, also flashes caution as a third indicator. Currently, NUPL is about -0.23, placing investors in the selling zone. At the November low, NUPL fell to about -0.27, after which a strong recovery began. This indicates that panic is in the air but not yet extreme, suggesting a delayed bottom.
Falling withdrawals, whale sales, and unfinished selling suggest that confidence in the markets is weak.
Derivatives show a strong short position, not strong demand.
When spot market buyers are cautious, derivatives markets have become the main source of upward movement.
Binance's liquidation data shows the cumulative leverage of short positions is nearly 1.91 billion dollars, while long positions have dropped to about 168 million dollars. This creates a significant imbalance in favor of bears.
When there are many short positions, even small price rallies can trigger forced buying. If Bitcoin rises, short sellers will have to close positions, which can fuel sharp pullbacks. This creates the possibility of a short squeeze.
However, this is not healthy demand. Price rallies due to liquidations generally fade unless supported by real accumulation. Without stronger spot buying and whale investor participation, any potential rise may be temporary. When a possible short squeeze raises prices, additional long positions may open, which keeps downside risks alive.
Currently, derivatives bring volatility, not stability. What is needed for the price of BTC is spot demand, which is currently lacking.
Key Bitcoin price levels show $69,000 and lower risk zones.
If Bitcoin cannot maintain its current support, blockchain and technical models indicate clear downside targets.
UTXO Realized Price Distribution (URPD) shows where existing Bitcoin supply was last purchased. These clusters often act as support during declines.
The strongest short-term URPD cluster is found around the $66,890 level, which focuses on about 0.95% of the supply.
Below this, the next large cluster is found around the $63,111 mark, which contains about 1.14% of the supply. There may be buyers in these areas if the price continues to fall. This is BTC's strongest short-term on-chain support.
From a technical perspective, a drop below $75,630–$75,130 opens the way to $69,500. If this level is lost, Bitcoin could fall to the $66,000–$63,000 range, which are significant cluster levels. In deeper selling, the $61,840 support is emphasized. Thus, $69,500 forms an important decision zone if $BTC loses $75,130.
Upside recovery attempts face resistance near $79,890 and $84,140. A sustainable rise above $84,140 is needed to confirm the upward trend. Until then, downside risks remain dominant.