Bitcoin's recent price pullback has coincided with increased selling pressure in futures markets and slowing demand from U.S. investors, but a rebound remains possible. A recurring chart pattern suggests that if specific conditions are met, Bitcoin (BTC) could re-enter its upward trend channel.
Futures Market Dominates, Spot Demand Weakens
The current price correction mirrors a shift in the overall market activity, with derivatives trading taking precedence. While demand was previously stable, Coinbase's premium index recently turned negative, indicating a lack of follow-through from U.S. investors.
Order book data reveals buying support around the $70,000 mark, with both spot and perpetual futures markets showing a buyer's willingness to step in.
Early Pattern Repeats, Hinting at Rebound Potential
On lower timeframes, Bitcoin is forming a price adjustment pattern similar to the one observed between March 6th and March 8th. At that time, prices fell and touched internal liquidity levels before reversing upwards.
The current trend follows a similar trajectory, with consecutive lower lows potentially signaling an impending phase of momentum exhaustion.
In the prior breakout, price reversals were accompanied by a bullish divergence on the Relative Strength Index (RSI), where the RSI maintained equal lows while prices made new lows. This pattern previously signaled weakening selling momentum. Currently, similar divergence signals are emerging, further solidifying a bullish structural outlook.
Liquidation data also supports this view. Both events saw significant liquidations of long positions, which reduced open interest and flushed out over-leveraged positions.
If Bitcoin can swiftly reclaim the critical $70,000 level, it would align with the previous pattern's rebound path and could propel prices towards $76,000. $72,000 serves as a crucial pivot level; a decisive reclaim here could trigger a short squeeze, putting short positions in a precarious situation.
However, the pattern has a time limit. A break below $68,300 would shift market focus to the $65,000 and $62,000 zones, key areas where Bitcoin has accumulated liquidity on higher timeframes.