Bitcoin (BTC) fell 13% in the last four days, sliding to $63,844 from $79,300. It is currently trading below $69,000, which is the peak of the 2021 bull market, a level that many see as a support level.

The decline was accompanied by a sharp drop in futures activity, with BTC open interest falling by more than $10 billion in the last seven days.

Analysts are now focusing on long-term technical zones and on-chain indicators that may signal a major turning point for BTC.

Key takeaways:

Bitcoin dropped 13% in four days, sliding below the cycle peak of 2021 near $69,000 after a strong leverage reset.

A key demand zone for Bitcoin between $58,000 and $69,000 is supported by high transaction volume and the 200-week moving average.

Overbought technical and sentiment indicators suggest that downward pressure may be peaking for BTC, even if a relief rally does not manifest.

Why the level of $69,000 is important for Bitcoin

The level of $69,000 represents the peak of the bull market in 2021. The tops of previous cycles historically acted as support during bear markets. In the last cycle, Bitcoin reached the bottom near the 2017 high of $19,600 before briefly falling to around $16,000 in November 2022.

One-month Bitcoin chart. Source: Cointelegraph/TradingView

The current drop below $69,000 may follow this pattern. However, past cycles also show that prices can fall below previous tops before forming a final bottom. This keeps the downside risk open for BTC.

André Dragosch, head of research at Bitwise Europe, noted that a large portion of recent transactions occurred between $58,000 and $69,000. This range also aligns with the 200-week moving average near $58,000, reinforcing it as a key demand zone.

Bitcoin URPD chart. Source: Glassnode

Meanwhile, cryptocurrency analyst exitpump highlighted that large buy orders for BTC are visible in the order books between $68,000 and $65,000, suggesting buyer interest in dips.

Related: Bitcoin price could drop below $64K as veteran raises 'campaign sell' alarm

BTC flashes record overbought signals

Market analyst Subu stated that Bitcoin's weekly relative strength index (RSI) fell below 30. Bitcoin reached this level only four times, and in each case, the price rose by an average of 16% in the next four days.

Weekly Bitcoin chart and RSI comparison. Source: X

Cryptocurrency analyst I. Moreno also noted that the adjusted unrealized profit/loss (aNUPL) has also turned negative for the first time since 2023. This means that the average holder is now at a loss. Similar conditions in 2018–2019, 2020, and 2022–2023 led to price recoveries for BTC.

Although a relief rally may not form immediately, Moreno pointed out that the 'speed of deterioration of current sentiment' is much faster than in previous cycles. The analyst added,

“This rapid transition suggests a sharp reset of sentiment rather than a gradual decline, potentially shortening the capitulation phase.”

Adjusted unrealized profit/loss of Bitcoin NUPL. Source: CryptoQuant