Bitcoin price drops below $76K as onchain data sends mixed signals

Bitcoin (BTC) fell below $76,000 on Tuesday after failing to break $80,000 as uncertainties surrounding the reopening of the Strait of Hormuz and macroeconomic conditions unnerved the market. Meanwhile, technicals and onchain data sent mixed signals on BTC’s ability to sustain the recovery.

Key takeaways

• Bitcoin is trapped in a tight range with strong technical support at $75,500 and heavy resistance near $80,000.
• Bitcoin’s onchain metrics are mixed, with buy pressure rising but spot volume and active addresses declining.

Bitcoin price is sandwiched between two key levels

Bitcoin’s 30% recovery from sub-$60,000 lows reached on Feb. 6 was stopped by selling around the $78,000-$80,000 supply zone.

Related: Three Bitcoin charts say BTC price may rally toward $82K

Note that this is where the 20-week exponential moving average (EMA) sits currently, reinforcing the importance of this resistance level.

MN Capital founder Michael van de Poppe said the ongoing retracement was “typical behavior” ahead of the FOMC meeting. 

“Bitcoin touched the resistance zone at $79,000 and is consolidating,” van de Poppe said, adding:

“I think we’re still in for a strong period on the markets.”

BTC/USD daily chart. Source: Cointelegraph/TradingView

On the downside, Bitcoin retested support at $75,500, which is also the 20-day EMA, the 100-day EMA and the lower trend line of an ascending channel, as shown in the chart above.

Glassnode's UTXO realized price distribution (URPD), which shows the average prices at which ETH holders bought their coins, reveals that immediate resistance is around $78,000 where investors acquired 335,650 BTC. Investors acquired roughly 298,560 BTC at an average price of $75,500, marking it as a key support level.

Bitcoin URPD all-time high partitioned. Source: Glassnode

The chart above also shows a larger supply overhang around $82,000-$84,000, which could stall price rallies, while a significant support zone sits between $65,500 and $67,000.  

Notably, this is the price range defined by the ascending parallel channel in the TradingView chart above.

Meanwhile, Bitcoin’s liquidation heatmap shows BTC in a classic liquidation sandwich with heavy ask orders around $78,600 and dense bid positions below the spot price, as shown in the figure below. This highlights the relative tightness of the current market structure.

Bitcoin liquidation heatmap. Source: CoinGlass

As Cointelegraph reported, buyers are expected to fiercely defend the $75,500-$76,000 support level, while bears are mounting a defense at the $80,000 psychological level.

Bitcoin’s onchain "fundamentals remain weak"

Bitcoin market data is showing a “mix of bullish momentum and cautious sentiment,” contributing to the uncertainty in the market, data from Glassnode shows.

Spot CVD (cumulative volume delta, a metric measuring the difference between buying and selling volume over time) has increased to $54.8 million million from $18.3 million, marking a near 200% increase over the last week.

“This reflects strong bullish sentiment among market participants, suggesting heightened confidence in Bitcoin’s short-term direction,” the onchain data provider said in its latest Market Pulse report.

Spot volume has decreased by 13.8% to $5.99 billion from $6.95 billion a week ago, “suggesting reduced market activity,” Glassnode added.

Bitcoin spot CVD and spot volume charts. Source: Glassnode

Meanwhile, the number of daily active addresses dropped by 1.6% over the same period, “reflecting a more subdued state of network participation and reduced speculative interest,” Glassnode said, adding:

“While buying pressure remains firm, reduced speculative activity suggests a more measured approach, with investors balancing risk and capital rotation.”

Swissblock’s Bitcoin Fundamental index, which measures network health, growth, demand, activity, and capital flows, echoes this outlook.

The index rose toward neutral with BTC’s recovery from macro lows below $60,000, and picked up again as the price reclaimed the $70,000 level.

“Bitcoin’s price structure points higher, but fundamentals remain weak,” the private wealth manager said in an X post on Monday, adding:

“Price can still rise here. But for a medium-term trend shift, Bitcoin needs neutral-to-strong fundamentals to confirm.”

Bitcoin fundamental index. Source: Swissblock

Institutional demand for Bitcoin is also in neutral territory. While Strategy, the largest corporate Bitcoin holder, continues to buy BTC, flows into US-based spot Bitcoin ETFs turned negative, recording $273 million in net outflows on Monday.