1 Bitcoin Chart Correctly Predicts A 5% Retracement – But 3 Indicators Are Pointing To It Now

The price of Bitcoin saw a short-lived rebound after falling to recent lows, rising almost 5% from its lows at the end of January to test the $76,980 area. This price action in BTC came after establishing a bullish momentum on the 4-hour chart, where selling pressure seemed to be weakening.

At first glance, Bitcoin’s rebound seemed technically justified. There was a familiar short-term pattern that had been repeated before. But a closer look at the structure of the market and data on the chain shows that three major indicators are now beginning to question whether this recovery can develop into a lasting recovery.

Chart setup that indicated a 5% retracement.

In the framework of 4 hours, Bitcoin format An upward divergence between January 31st and February 3rd.

During this period, the price of Bitcoin made a lower low, while the Relative Strength Index (RSI), a momentum indicator, formed a higher low. This pattern often appears when the selling pressure begins to fade and short-term rebounds, even in a shorter period of time, become possible.

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A similar discrepancy appeared earlier between January 20th and January 30th. This arrangement led to a rally of about $84,640 before the sellers took control again.

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This time, the pattern resulted in a retracement of about 5%, which rose Bitcoin is about $76,980. The movement followed the same technical script as the previous one, reinforcing the idea that the bounce was structurally correct.

Bitcoin’s price recovery also received Macri’s support, said Martin Gaspard, cryptocurrency market strategist at FalconEx. Transfer ratios to Circulation of precious metalsjust before the divergence appears:

“Given the decline in metals on Friday, traders could expect a return to cryptocurrencies. While Bitcoin was previously seen as a beneficiary of gold’s strength, the capital that could have flowed into cryptocurrencies through these movements has instead turned to silver in recent months. This may return as silver cools.”“, he said.

But technical setups only work when buyers continue to support them. Here comes the first big challenge.

The first criterion – the URPD indicator shows strong selling walls at key levels of Bitcoin

The first metric to question the refund is the UTXO Realized Price Distribution (URPD), which maps where much of the Bitcoin supply last moved.

URPD data shows that the area near $76,990 contains about 0.46% of the total supply. This makes for a notable supply rally, with many holders approaching breakeven levels. This explains why the recent 5% retracement stopped at $76,980.

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When the price approaches these areas, selling pressure often increases as investors try to exit without losses.

This model has appeared once before.

stop The previous recovery of Bitcoin At the end of January (mentioned earlier) close to $84,640, close to the URPD territory, which shows a great rally in supply at 3.05%. That wall was too strong to break.

Now, the recent recoveries have stopped again near another area with heavy supplies. This suggests that rebounds are restricted by holders, and they can be sold into resistance rather than building new positions. Without enough new demand, these walls remain difficult to clean in the first place.

High stock reserves and low rate of superficial recognition show low persuasion

The second and third measures come from exchange flows and earnings behavior, and together they paint a worrying picture.

Bitcoin exchange reserves recently reached 2,718 million BTC on January 19. Since then, the reserves have reached about 2,752 million bitcoins.

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This represents an increase of about 34,000 BTC, or about 1.2%, in less than three weeks.

Instead of coins leaving exchanges for a long-term hold, more Bitcoin is now returning to exchanges. This usually reflects an increasing willingness to sell rather than hoard.

Meanwhile, the SOPR is near its annual low. SOPR measures whether currencies are sold at a profit or a loss. A value less than 1 means that investors are making losses.

At the end of January, the SOPR index fell to close to 0.94. It is currently close to 0.97, still below the neutral level. This means that many traders are also selling underwater.

When the increase in exchange reserves combined with a falling interest rate in the base, this indicates a defensive behavior. Investors use bounces to exit positions rather than build long-term exposure.

This weakens the basis for any recovery unless a major catalyst emerges. However, FalconX’s Martin Gaspar points to a sentiment catalyst related to regulatory clarity that may try to change the Bitcoin (BTC) price outlook:

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“In the coming weeks, key catalysts will include any developments in the cryptocurrency market structure project, with key groups expected to meet at the White House this week to discuss the project.”“, he shares.

But price levels still hold the key!

Bitcoin price levels and the Smart Money indicator show that the rebound is losing support

Confirm the Bitcoin price movement What the three scales indicate. For Bitcoin to regain its momentum, several levels must be crossed:

• $76,980: Immediate resistance from the current supply pool
• $79,360: The next short-term hurdle
• $84,640: Significant long-term resistance associated with Bitcoin’s largest URPD zone

A sustained recovery requires clean 4-hour closes above these levels, especially above $84,640. So far, the price of Bitcoin has failed to prove its strength above the first barrier.

The Smart Money Index adds another layer of caution. This indicator tracks the institutional style positioning. On the 4-hour chart, it is moving below the signal line from late January. This shows that larger players do not increase exposure in conjunction with bounce.

The last time the indicator briefly crossed above the signal line in late January, Bitcoin rose about 5%. This confirmation is currently missing. Without renewed participation in the smart money, all short-term rallies in Bitcoin could fizzle out.

Also, if panic-driven incremental selling, as evidenced by the low price recurrence rate, pushes the price of Bitcoin lower, $72,920 becomes a key zone. New bearish targets could appear if a 4-hour candle closes below.