Bitcoin bounces off major support after sharp sell-off

​​​Bitcoin bounces off major support zone

​Bitcoin has come under renewed pressure since mid-January, with a sharp sell-off marking one of its most significant pullbacks and underscoring how sensitive the cryptocurrency remains to macroeconomic shocks, positioning dynamics and shifts in investor confidence.

​At the beginning of the year, Bitcoin had been trading in a relatively constructive environment. After consolidating through early January, prices pushed higher as optimism around regulatory clarity, selective institutional engagement and stabilising crypto market liquidity supported sentiment. The move suggested that much of the forced deleveraging seen at the end of last year had been absorbed, leaving the market better balanced and more resilient than during previous downturns.

​That stability, however, proved fragile once broader market conditions deteriorated. The recent sell-off was triggered by a renewed risk-off move across cryptocurrencies and Bitcoin slipped quickly as traders sought liquidity.

​Positioning amplified the decline. In the weeks leading up to the sell-off, derivatives data pointed to a rebuild of speculative long exposure as traders positioned for a continuation of Bitcoin’s early year recovery.

​When prices failed to extend higher and instead broke back below key short term technical levels, stop loss orders were triggered and liquidations accelerated. The mechanical unwinding of leveraged positions pushed bitcoin lower at speed, reinforcing the intensity of the move beyond what spot-market selling alone might have caused.

​Institutional behaviour also played a role. Although Bitcoin remains the primary gateway asset for institutional crypto exposure, flows into spot Bitcoin exchange-traded funds (ETFs) since the start of the year have been uneven. Periods of inflows have been followed by renewed outflows during bouts of volatility, reflecting a cautious and tactical approach rather than aggressive accumulation. During the sell-off, the absence of immediate, large scale dip buying from institutions left prices exposed, allowing downside momentum to build more easily.

​Macro uncertainty has remained a constant theme throughout the year and has continued to cap Bitcoin’s upside. While easing monetary policy is generally supportive for non-yielding assets like Bitcoin, investors have become increasingly sensitive to the pace and reliability of that easing. Concerns about inflation persistence, growth risks and geopolitical developments have encouraged a more defensive stance, making rallies vulnerable when confidence wavers.

​Despite the severity of the recent drop, there are signs that the sell-off has been driven more by positioning and sentiment than by a deterioration in Bitcoin’s longer-term fundamentals. Buyers have begun to emerge at a well-watched support zone, suggesting that underlying demand remains intact. Longer-term holders appear more inclined to absorb supply on weakness, viewing the move as a correction within a broader consolidation rather than the start of a new bear phase.

​Geopolitical uncertainty has added another layer to the narrative. While periods of heightened tension can sometimes reinforce Bitcoin’s hedge appeal, they can also contribute to broader market stress and liquidity tightening, which tends to weigh on risk assets in the short-term. This dual role has been evident during the recent episode, with Bitcoin caught between its long term store-of-value narrative and its short term behaviour as a risk-sensitive asset.

​Taken together, Bitcoin’s recent sharp sell-off highlights a market still in transition. Improving regulatory signals and ongoing institutional engagement provide a supportive backdrop, but macro shocks, leverage dynamics and cautious capital allocation continue to drive sharp swings.

​Looking ahead, Bitcoin’s direction will likely depend on whether broader cryptocurrency conditions stabilise and whether confidence can be rebuilt without renewed liquidation pressure.

​For now, the episode serves as a reminder that even as Bitcoin matures as an asset class, it remains highly responsive to shifts in sentiment, liquidity and global risk appetite.

​Bitcoin bullish case:

​Bitcoin is seen holding and bouncing off its major long-term $76,702.93 - $73,581.22 support area. It must continue to hold on a daily chart closing basis for the bulls to gain a foothold.

​Even if they do, the November 2025 low at $80,619.71 is expected to act as resistance. En route lies minor resistance at the February 2025 low at $78,300.20.

​For a lasting bullish reversal to be seen, bitcoin needs to break through the $89,226.00 - $91,143.38 resistance zone but even if it does, the $94,095.33 - $94,766.54 resistance area may cap the upside. It is made up of the mid-November low and the December and January highs and would need to be overcome for the more significant $98,330.30 - $100,762.58 resistance zone to be back in sight.

​Bitcoin bearish case:

​Bitcoin's recent sharp sell-off found interim support in the key $76,702.93 - $73,581.22 support area, consisting of the March and October 2024 highs, March and April 2025 lows.

​Were it to give way on a daily chart closing basis, however, the March-to-June 2024 highs at $72,756.63 - $71,725.44 would probably hit next. These levels represent another potential support zone for bitcoin.

​A fall through $71,725.44 may trigger a slip towards the July 2024 peak at $70,040.75 being witnessed.

​Short-term outlook:

Bullish, targeting the November 2025 low at $80,619.71, while holding above support at $76,702.93 - $73,581.22.

​Medium-term outlook:

Neutral with a bearish bias while trading below the $94,095.33 - $94,766.54 resistance area but above the October 2024 peak at $73,581.22.

Bitcoin daily candlestick chart