Following last week’s recovery Bitcoin is capped by resistance
Bitcoin’s latest sell-off shows it still trades like a high-beta risk asset, with ETF redemptions, leverage and cryptocurrency stress driving volatility.
Bitcoin capped by resistance zone
Bitcoin has endured heightened volatility since the start of the year, with a sharp sell-off highlighting that even the largest and most liquid cryptocurrency remains highly exposed to macroeconomic pressures, leveraged positioning and abrupt shifts in investor sentiment.
While Bitcoin’s longer-term appeal - as a store of value and potential hedge against monetary debasement - continues to underpin strategic holders, recent price action has been dominated by short-term dynamics. These forces have amplified downside risk and exposed how fragile conviction becomes during risk-off episodes.
Early in the year, Bitcoin showed tentative signs of resilience. After rebounding from late-2025 weakness, it traded in a choppy but broadly stable range, supported by optimism around improving regulatory clarity, sustained institutional access via spot exchange-traded funds (ETFs), and a belief that much of last year’s forced deleveraging had already played out. That stability, however, masked vulnerabilities that became apparent once broader financial conditions tightened.
The immediate catalyst for the latest decline has been a renewed wave of broad-based de-risking across crypto markets. Despite its “blue-chip” status, Bitcoin was once again treated as a high-liquidity risk asset rather than a defensive allocation.
Market structure and positioning significantly magnified the move. Spot ETF redemptions, forced liquidations in derivatives markets and cascading stop-losses combined to accelerate the sell-off. As prices broke below key technical support zones, the mechanical unwinding of leveraged long positions drove Bitcoin lower far faster than spot selling alone would have achieved, reinforcing a sense of disorder across digital assets.
This episode has also undermined several of Bitcoin’s most commonly cited narratives. It has failed to act as an inflation hedge, has not reliably served as a geopolitical safe haven, and has increasingly struggled to sustain momentum once liquidity tightens and volatility rises.
That breakdown matters because Bitcoin remains the anchor asset for the broader crypto market. When it fails to behave as a hedge, haven or trend asset, confidence across the ecosystem weakens, and selling pressure tends to spread rapidly as investors reassess crypto’s role in portfolios.
Rather than cushioning shocks, Bitcoin has increasingly become the conduit through which macro stress, liquidity constraints and positioning imbalances are transmitted across the digital asset space.
Looking ahead, near-term direction will hinge on whether ETF flows return to net accumulation and whether leverage can rebuild in a more sustainable manner without immediately reigniting liquidation risk.
For now, the latest sell-off is a reminder that despite its maturity, institutional footprint and deep liquidity, Bitcoin remains vulnerable to the same forces that drive other risk assets: tightening financial conditions, abrupt sentiment shifts and the rapid unwinding of crowded trades.
Bitcoin bullish case:
As long as Bitcoin continues to hold above last week's $60,132.75 low on a daily basis, other attempts to break through the $70,040.75 - $73,757.39 resistance area are expected to be seen.
A rise and daily close above the March 2024 peak at $73,757.39 would likely engage the April 2025 low at $74,441. If also overcome, the March 2025 low at $76,702.93 may be reached as well.
Bitcoin bearish case:
While Bitcoin remains below its March 2024 high at $73,757.39, the psychological $60,000 region remains in sight. Below it lies another support zone at $59,635.83 - $56,148.93 which encompasses several of the weekly lows seen between March and September 2024.
Short-term outlook:
Bearish while below March 2024 high at $73,757.39, targeting the $59,635.83 - $56,148.93 zone in on a fall through the $60,000 level
Medium-term outlook:
Neutral with a bearish undertone while below the March 2024 high at $73,757.39 but above the $56,148.93 mid-August 2024 low; failure there might engage the $50,000 region and the August 2024 low at $49,217.00
Bitcoin daily candlestick chart
Bitcoin weekly candlestick chart
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