The price of Bitcoin (BTC) has dropped by about 9% after briefly reaching $72,000 on March 25. The entire 30-day gains have now been wiped out and the monthly change is negative, -2.6%. At the time of writing, the price is moving sideways near $66,900 over the last 24 hours.
The drop caused a bearish breakout from the pattern on the 12-hour chart. However, latent bullish divergence suggests that a short-term rebound is possible. Whether the rebound is strong enough to overcome the resistance level, however, depends on the blockchain data.
Head and Shoulders breaks out on the 12-hour chart.
The 12-hour BTC price chart shows a head and shoulders pattern that has developed since the end of February. The neckline was around 67,700 dollars and the breakout occurred on March 27.
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The correction calculated from this pattern would predict a drop of about 12% from the neckline. If this occurs, Bitcoin's price would fall below the psychological 60,000 dollar threshold, with a target of the 59,400 dollar area.
The RSI, or Relative Strength Index, which measures sentiment, however, provides a different picture. Between February 28 and March 27, the price formed a higher low, but the RSI formed a lower low.
This hidden bullish divergence typically indicates a continuation of the trend rather than a reversal. This time, it has already brought a 1.87% recovery from the nearest low.
Divergence indicates that the support level around 65,000 dollars may hold temporarily. However, the recovery faces a strong supply wall just above, and the whales do not seem to be active enough to break through it.
Over 6% of the supply is located between 66,900â69,400 dollars.
UTXO Realized Price Distribution (URPD), a metric used by Glassnode, shows the price at which the current bitcoin supply last changed hands. Based on this, three large clusters can be found directly above the current price.
Around 66,900 dollars (close to the current price), about 2.37% of the total supply last changed hands. At a price of 68,100 dollars sits another 1.96%, and at 69,400 dollars, another 1.96%. In total, about 6.29% of the bitcoin supply is concentrated in the 2,500 dollar range above the current price.
These clusters act as resistance levels, as investors who bought at these prices now sit close to breakeven and often sell during recoveries to get out with minimal losses.
Whale behavior confirms the risk level of current bitcoin supply areas. The largest group (100,000â1 million BTC) reduced their holdings from 675,200 to 670,000, a drop of 5,200 BTC on March 24.
A medium-sized group (10,000â100,000 BTC) first decreased, then recovered, and ended up at approximately the same level, 2.25 million. Only the smallest group of whales (1,000â10,000 BTC) increased slightly, rising from 4.21 million to 4.22 million.
The combined net result of all three groups is an increase of about 4,800 BTC. Nevertheless, the overall picture of conviction is weaker than the number alone suggests.
The largest wallets with the most market influence reduced their exposure by 5,200 BTC. The smallest group's addition of 10,000 BTC does not affect the direction on the same scale, as the selling of large holders has historically preceded further weakness. Smaller purchases, on the other hand, often only reflect the exploitation of the dip and merge into the upper supply wall.
This means that the potential next recovery from the hidden bullish divergence is likely to stop in the 66,900â69,400 dollar range (i.e., the same supply area referenced earlier).
Bitcoin price forecast and the 66,600 dollar mark.
The immediate critical level for Bitcoin is 66,600 dollars. As long as the price remains above this level, the largest concentrated supply has not yet caused a broader wave of selling. A recovery from this level could push the price towards 68,700 dollars and the psychological 70,000 dollar mark.
However, 70,000 dollars would require breaking through all three supply clusters. Due to the weak conviction of whale investors, any recovery below 70,000 dollars remains vulnerable to a new wave of selling. The bear market structure only improves above 72,000 dollars, which is the highest point of the right shoulder.
Moving upwards, losing 66,600 dollars opens the way to 65,200 and 63,300 dollars. Below this, a move corresponding to a head and shoulders pattern of about 12% targets the 59,400 dollar area, which would push Bitcoin below 60,000 dollars for the first time since February's lows.
Currently, 66,600 dollars separates the low recovery towards 69,400 dollars from the measured decline movement below 60,000 dollars.