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Bitcoin has had a rocky start to February with continued negative sentiment and poor market liquidity. However, the latest data suggest that the selling pressure is gradually reducing, while the first signs of recovery are emerging.
These signals are still not strong enough to confirm a reversal, but they remain among the few positive signals at this point.
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3 reasons why Bitcoin can soon recover from below $80,000
A recent report from BeInCrypto noted that Cryptocurrency funds saw inflows of $1.7 billion last week. This reversed the year-to-date inflows into net losses.
However, early indications suggest that selling pressure may be fading. This is evident in the Coinbase Premium Index, which measures the price difference between Bitcoin on Coinbase and other exchanges.
The Coinbase Bitcoin Premium Index is recovering, although still negative. This is an early sign that demand to buy from the US via Coinbase is slowly returning. Historically, this often indicates a reversal once the premium goes from negative to positive.
“Coinbase Bitcoin Premium is recovering. April 2025 lows set. Don’t call it a huge rally, but things look good for a relief rally.” to wait The investor Ted.
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Another signal that has been interpreted pessimistically is that Bitcoin is currently trading below the average cost of all US Bitcoin funds. CryptoQuant data puts this level at around $79,000.
However, historical trends from the approval of US Bitcoin funds show that Bitcoin rarely stays below this cost level for long.
History suggests that this area often acts as support for demand before a sharp rebound. Institutional investors and long-term holders typically have little incentive to sell at a loss below their cost basis.
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The chart shows that during the most bearish phase in Q3 2024, Bitcoin tested this level several times. Each time, the price recovered in one to two weeks.
“If you missed the boat that didn’t cost $80,000, it’s back to get you. You’re now buying Bitcoin at a price cheaper than the average price of all US ETFs combined. Wall Street is down 10%, while you started. Its maximum pain = your maximum opportunity.” Analyst Will Factor to not think too low.
While many analysts continue to highlight the negative signals, SwissBlock – a digital analysis and investment company based in Switzerland – noted a positive convergence between network growth and liquidity that emerged in early February.
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I noticed Swissblock said the last time network growth and liquidity recovered from low levels was in 2021, before Bitcoin reached a new all-time high. This indicates that another phase of recovery may be approaching.
“Continued growth in these indicators may be the catalyst for a final push,” I waited Swissblock.
Overall, these indicators suggest that Bitcoin may not stay below $80,000 for a long time and may soon return to this level.
However, not all forecasts are optimistic. caution Alex Thorne, head of research at Galaxy Digital, said Bitcoin’s recent weakness may continue. The price may fall further towards the 200-week moving average, close to… $58,000in the coming weeks or months. Includes main engines Low liquidity The absence of short-term positive stimuli.
These different theoretical perspectives provide a broader view of the forces that shape the market. It can also help Traders minimize risks while looking to seize potential opportunities.
