Bitcoin's price trajectory is a rollercoaster, with a recent rebound hitting a wall near $71,000. This resistance point has become a battleground, mirroring the most fearful sentiment since 2022. Trading data reveal a broader risk-off trend, with spot volumes on major exchanges down 30% since late 2025 and retail participation waning. The cryptocurrency's bounce from last week's sell-off is stalling, prompting traders to view it as a classic bear-market pattern. This pattern involves a sharp relief rally attracting dip buyers, only to be met by a wave of supply from investors seeking better exit prices. FxPro's Alex Kuptsikevich highlights the significant supply in the market, warning of a potential test of the 200-week moving average. The sentiment data echoes this fragility, with the Crypto Fear and Greed Index hitting rock bottom before recovering. Kuptsikevich emphasizes the low levels as a sign of more than temporary nerves. Liquidity conditions exacerbate the situation, making modest sell pressure trigger outsized moves and additional stop-outs, creating a feedback loop of price disorder. This dynamic explains Bitcoin's wild price swings while struggling to break through key resistance. Kaiko's analysis paints a broader picture of risk-off unwind, with trading volumes down 30% since October/November, and monthly spot volumes dropping from $1 trillion to $700 billion. The firm suggests a gradual exit of traders, especially retail investors, rather than a sudden market crash. This thin liquidity makes prices vulnerable to rapid declines with modest selling pressure, lacking the heavy panic-driven volume that typically signals a clear capitulation. Kaiko also connects this move to the familiar four-year halving cycle, with Bitcoin's peak in late 2025/early 2026 and a sharp retracement into the $60,000-$70,000 zone, representing a significant drawdown. Historically, these bottoms take time to form and often involve multiple failed rallies. The key question remains: can Bitcoin hold the $60,000 area? If buyers defend it, the market may consolidate. Otherwise, the thin-liquidity dynamics could return, especially with risk-off macro conditions persisting.
