Bitcoin begins the new week at a critical inflection point, with price action, derivatives positioning, and on-chain data sending mixed signals on whether the market is preparing for a rebound toward $75,000 or entering a deeper bearish regime.After briefly dipping to $59,000 earlier this month, Bitcoin has stabilized near $68,000–$69,000, a historically significant zone that now defines near-term market risk.1. Bitcoin Holds Key Long-Term Support Near $69KBitcoin closed last week above its 200-week exponential moving average, a level closely watched by long-term investors. Price is also hovering near the former 2021 all-time high just above $69,000, placing BTC back inside a range that capped price for much of 2024.Analysts note that Bitcoin has retraced roughly half of the downside “wick” from its February plunge. A sustained move higher could reinforce the range as support, while acceptance below it would raise the risk of a deeper breakdown.Some traders argue a move back toward $75,000 could trigger a “surprise recovery,” especially given still-negative market sentiment.2. Liquidations Remain Elevated Despite Narrow Price RangeWhile spot volatility has cooled, derivatives markets remain fragile. Data from CoinGlass shows more than $250 million in liquidations over the past 24 hours, even as Bitcoin traded within a sub-$3,000 range.Positioning suggests traders are increasingly clustered on the long side just below $68,000, creating potential downside liquidity targets. At the same time, long positions still dominate overall, leading some analysts to argue that bulls retain tactical control if spot demand improves.Notably, short liquidations surged last week as BTC briefly pushed above $70,000, marking the largest daily short squeeze since September 2024.3. U.S. Inflation Data Could Drive Volatility Later This WeekWith U.S. markets closed Monday for Presidents’ Day, macro-driven volatility is expected to pick up later in the week.Key releases include:Personal Consumption Expenditures (PCE) inflation dataQ4 U.S. GDPPCE is the Federal Reserve’s preferred inflation gauge and comes at a sensitive time for policy expectations. While recent CPI data softened, markets still see a low probability of rate cuts at the March FOMC meeting, according to CME Group data.Macro uncertainty and geopolitical tensions remain elevated, raising the risk of sharp, data-driven moves across risk assets.4. On-Chain Data Flags $55K–$56K as a Key Stress ZoneOn-chain analysts at CryptoQuant highlight the mid-$50,000 region as a critical downside test if selling resumes.This zone aligns with:Bitcoin’s 200-week simple moving averageBitcoin’s realized price (around $55,800)Historically, this confluence has marked accumulation zones during major corrections—but whether it holds depends on investor resilience rather than momentum alone. Bitcoin’s net unrealized profit/loss (NUPL) recently fell into the “fear” region, near levels last seen in early 2023, indicating reduced profitability across the network.5. Profitability Metrics Hint at Possible Bear TransitionMore concerning signals come from Bitcoin’s adjusted spent output profit ratio (aSOPR), which measures whether coins are being sold at a profit or loss.aSOPR dropped below 1.0 earlier this month, indicating widespread realized losses—behavior historically associated with capitulation phases. Analysts warn that unlike mid-cycle pullbacks, aSOPR has struggled to reclaim breakeven, suggesting structural weakness rather than a shallow correction.“If aSOPR fails to reclaim 1.0 soon, the probability increases that this is not a simple pullback but a broader regime shift,” CryptoQuant analysts said.Bitcoin sits at a crossroads. A successful defense of the $68,000–$69,000 range could open the door to a recovery toward $75,000, particularly if macro data supports risk appetite. Failure, however, may shift focus toward the mid-$50,000 zone and reinforce concerns of a deeper bearish phase.
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