Bitcoin (BTC) is currently testing the pivotal level of $71,500, a crucial benchmark relevant across multiple timeframes. Analysts are observing a potential upward trajectory toward the $80,000 mark as recent price action indicates a bullish trend. In the past week alone, Bitcoin has approached the $71,500 inflection point four times. A positive sign is that the price remains above the 50-period exponential moving average (EMA) on the four-hour chart. However, the 50-day EMA on the daily chart is still acting as a barrier, presenting resistance.
Crypto trader Skew referred to the current price situation as a “compression zone,” suggesting that the tightening price range could lead to a strong directional move. An emerging bullish inverse head and shoulders pattern on the four-hour chart identifies $71,500 as the neckline. If a breakout above this level occurs, the immediate technical target is set around the monthly high of $76,000, translating to a 7.35% increase from current levels. Market analyst Mikybull has extended this forecast to potentially reach $80,000.
In another indication of upward momentum, an on-chain signal suggests the possibility of a rally ranging from 10% to 14%. The seven-day standard deviation of short-term holder realized profit and loss flows on Binance decreased to 255 as of March 24, a figure reminiscent of levels observed before previous price rallies. A similar measure of 277 on February 27 preceded a 14% increase, while a reading around 289 in late December marked a nearly 10% gain. Presently, the observed compression demonstrates reduced sell-side volatility, with the short-term holder distribution showing more controlled movements.
The recent upward strength in Bitcoin’s price coincides with widespread market optimism associated with an anticipated ceasefire in the ongoing conflict between the US and Iran. However, on Wednesday, Iran dismissed the US peace proposal and laid out its own terms for resolving the conflict, according to the Kobeissi Letter. Despite this geopolitical tension, Bitcoin showed resilience, though it remains sensitive to fluctuations in the US dollar and energy prices.
The derivatives market is experiencing increased activity, with Bitcoin’s open interest (measured in USD) climbing by $500 million to reach $16.5 billion over the past 24 hours. Funding rates have turned positive at 0.03% since Monday, indicating bullish sentiment primarily driven by the futures markets. Notably, spot participation appears to lag, as evidenced by a weak aggregate cumulative volume delta of -$87 million and a negative Coinbase premium, pointing to declining demand among US investors.
As order flow data reflects a divide between buyers and sellers in both spot and futures markets, Skew emphasized that for Bitcoin to maintain a breakout above $71,500, it will require the backing of robust underlying demand. Stronger buyer support, consistent accumulation, and an ability to absorb selling pressure from short traders are essential for sustaining the rally. During the New York session, a $60 million bid was filled, indicating renewed demand; however, a clear continuation of this momentum is necessary for Bitcoin to uphold a bullish structure above the critical $71,500 threshold.
