Key Points
- Bitcoin [BTC] needs to turn the $85,000 resistance into a support zone for a bullish breakout.
- Tracking ETF flow trends and key technical levels is crucial for determining BTC’s near-term trajectory.
Bitcoin [BTC] has been fluctuating between $81,000 and $85,000, following its drop to $78k a week ago.
It is now crucial for a rally that the $85k resistance turns into a solid demand zone.
Technical Analysis and Signs of a Potential Bitcoin Bottom
Technical indicators suggest that if BTC cannot maintain the $81,000 support level, it may test lower support zones around $78,446.
However, if it can reclaim and consolidate above the $85,000 resistance, this could pave the way for higher targets.
On the 17th and 18th of March, Bitcoin saw a half-billion-dollar inflow into BTC ETFs, marking the first consecutive institutional influx this month.
The fear index, moving from “extreme fear” to fear, has historically indicated a potential bottom, providing an opportunity to purchase BTC at a discount for outsized returns.
Long-term holders (LTHs) seem to concur. On the 16th of March, they purchased 167k BTC at $82k.
Despite strong inflows and accumulation, Bitcoin has struggled to break $85k.
Heavy leverage at support keeps it above $80k, but triggers liquidations when profit-taking begins at $85k.
Potential Risks and the Need for Strong Buying Momentum
Each BTC dip results in a spike in leverage and a $2B increase in Open Interest (OI).
But as BTC reclaims $85k, liquidations occur, OI unwinds, and the price drops back to $80k.
This pattern leaves Bitcoin vulnerable, with a potential pullback amid ongoing macroeconomic risks.
In addition, data from Binance shows low trading volume, with spot markets lacking significant buy orders.
There are signs of $85K turning into support, but it’s not there yet.
Without strong institutional accumulation, sell-side liquidity could increase, leading to mass liquidations of long positions and a potential retrace to the $80k demand zone.
For a bear trap to be invalidated and triggered, Bitcoin must generate strong buying momentum at $85k to break resistance.
