Bitcoin is trading above crucial demand levels as bulls attempt to reclaim higher prices after weeks of massive selling pressure and macroeconomic uncertainty. The leading cryptocurrency has lost over 29% of its value since reaching its all-time high of $109K in January. However, Bitcoin has rebounded over 7% from Tuesday’s $81K low, fueling speculation about its next move.
Market sentiment remains mixed, with some analysts arguing that Bitcoin has entered a bear market, while others see this as a healthy correction before another rally. Uncertainty surrounding global economic conditions, including rising inflation and ongoing trade tensions, continues to impact investor confidence.
Despite the uncertainty, CryptoQuant data suggests that Bitcoin demand remains strong. Since February 23, when BTC was trading around the $96K level, new investors have acquired 172,705 BTC. If this trend continues, Bitcoin could see renewed momentum, potentially leading to a recovery phase. However, bulls must reclaim key resistance levels to confirm a reversal and prevent further downside pressure.
Bitcoin Holds Above Key Levels But Lacks Momentum For Recovery
Bitcoin is trading above crucial price levels but still faces a significant test as bulls attempt to confirm a recovery. Since late January, trade war fears and erratic economic policies from US President Donald Trump have shaken both the crypto and equities markets.
Investors are growing increasingly concerned about a potential recession, with many speculating that Bitcoin has already entered a bear market. Hopes for a bullish 2025 are fading as BTC struggles to reclaim lost ground.
Despite the uncertainty, top analysts remain optimistic about Bitcoin’s future performance. On-chain data suggests that strong accumulation is taking place, a pattern typically seen before market recoveries. Axel Adler, a leading crypto analyst, shared insights on X, revealing that since February 23, when BTC was trading around $96K, new investors have acquired 172,705 BTC. This level of demand is comparable to the buying pressure seen after the FTX collapse, which marked the bear market bottom.
Bitcoin could still perform well this year if demand remains steady and macroeconomic conditions stabilize. However, bulls must push Bitcoin above key resistance levels to confirm a reversal. A failure to reclaim $90K could lead to prolonged consolidation or even another leg down in price.
Price Action: Bulls Must Defend $85K
Bitcoin is trading at $85,900 after successfully pushing above the 200-day moving average (MA) and exponential moving average (EMA). Currently, BTC is retesting the EMA, a critical level that could determine the next move for the market.
Bulls must hold above the $85K support level to maintain momentum and start a recovery toward $90K. A confirmed push above $90K would signal strength and could lead to further upside, potentially revisiting key resistance levels from earlier in the year.
However, if Bitcoin fails to defend the $85K level, the market could see renewed selling pressure. A drop below this support could trigger a deeper correction, with BTC likely falling below the $80K mark. Given the uncertainty surrounding macroeconomic conditions and investor sentiment, traders are closely watching how Bitcoin reacts around these levels. Holding above $85K could serve as a foundation for a broader market recovery, but a break below it may confirm a continuation of the bearish trend.
Featured image from Dall-E, chart from TradingView
