Can This Bitcoin Bounce Survive? Experts Weigh In With Sarcastic Wit!

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It appears that the price of Bitcoin has recently experienced a brief revival, having ascended nearly 5% from its January nadir, thereby daring to test the lofty heights of the $76,980 region. This sudden surge followed a most agreeable technical setup on the 4-hour chart, where the hitherto insurmountable selling pressure seemed to relent, if only momentarily.

On first consideration, one might be inclined to deem this BTC rebound as entirely justified in the realms of technical analysis. After all, a familiar short-term pattern had been observed before, like an old friend returning to visit. However, a deeper examination of the on-chain and market structure data reveals that three quite significant metrics now cast a shadow of doubt upon the possibility of this bounce transforming into a more sustained recovery.

Chart Setup That Portends a 5% Bounce

During the enchanting period between January 31 and February 3, Bitcoin, in a display reminiscent of a spirited dance, formed a bullish divergence on the 4-hour timeframe.

In this instance, whilst the price of BTC descended to a lower low, the Relative Strength Index (RSI), that esteemed momentum indicator, merrily formed a higher low. Such a pattern often suggests that the selling pressure may be waning and short-term rebounds, albeit fleeting, are indeed likely.

A similar divergence waltzed across the stage earlier, between January 20 and January 30, leading to a rather impressive rally toward $84,640 before the sellers once again regained control, much like an overzealous chaperone at a ball.

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On this occasion, the pattern yielded a rebound of nearly 5%, lifting Bitcoin toward the fabled $76,980. The move adhered to a well-rehearsed technical script, reinforcing the notion that this bounce was indeed structurally valid, if one were to overlook the skeptics.

The BTC price bounce also enjoyed the backing of macro factors, as noted by the astute Martin Gaspar, Senior Crypto Market Strategist at FalconX, who attributed this movement to a curious rotation from precious metals, just prior to the divergence making its grand entrance:

“Given Friday’s blow-off top in metals, traders may be anticipating a rotation back to crypto. While BTC had previously been seen as a beneficiary of strength in gold, capital that may have flowed to crypto off such moves instead funneled to silver in recent months. This could revert as silver cools off,” he remarked with the wit of a seasoned observer.

Yet, one must remember that technical setups only flourish when buyers continue to support them. And herein lies the first major obstacle.

Metric One – URPD Reveals Strong Sell Walls at Key BTC Levels

The first metric casting doubt upon our beloved rebound is the UTXO Realized Price Distribution (URPD), which diligently maps where substantial portions of Bitcoin’s supply last ventured.

The URPD data indicates that the area surrounding $76,990 comprises approximately 0.46% of the total supply. This makes it a rather notable supply cluster, where many holders are perched near their break-even levels, much like hesitant suitors at a ball. This elucidates why the recent 5% bounce faltered at the aforementioned $76,980.

As price approaches these zones, one often witnesses an uptick in selling pressure as investors eagerly seek an exit without incurring losses. Such patterns are not new and have indeed graced us before.

The earlier BTC rebound in late January, as mentioned, stumbled near $84,640, close to the URPD zone, which boasted a massive supply cluster of 3.05%. Alas, that wall proved too formidable to breach.

Now, it seems our latest rebound has likewise paused near the next formidable supply-heavy zone. This suggests that these rebounds are being capped by the holders, possibly opting to sell into resistance rather than cultivate new positions. Without an influx of fresh demand, these sell walls remain as unyielding as an old-fashioned matriarch.

Rising Exchange Reserves and Low SOPR Indicate Weak Conviction

The second and third metrics derive from exchange flows and the intriguing behavior of profits, painting a rather disheartening picture.

Bitcoin exchange reserves recently dipped to a low of 2.718 million BTC on January 19, only to rise again to approximately 2.752 million BTC.

This increase of around 34,000 BTC, or about 1.2% in less than three weeks, does not inspire confidence.

Rather than seeing coins depart exchanges for long-term holding, more Bitcoin is now being returned to trading platforms, reflecting a growing readiness to sell rather than accumulate, akin to an eager crowd at a sale.

Simultaneously, the Spent Output Profit Ratio (SOPR) hovers near yearly lows, suggesting that many are parting with their coins at a loss, which is hardly a sign of robust confidence.

In late January, SOPR dipped to approximately 0.94 and currently languishes near 0.97-still below the neutral level. This indicates that numerous holders are selling even whilst they are underwater, perhaps like drowning swimmers grasping at straws.

The confluence of rising exchange reserves alongside low SOPR signals a defensive posture. Investors appear to be utilizing rebounds to exit positions rather than reinforcing long-term exposure.

This precarious foundation of recovery weakens considerably unless a significant catalyst emerges. Mr. Gaspar, however, hints at a sentiment-driven catalyst tied to regulatory clarity that might attempt to alter the BTC price outlook:

“In the weeks ahead, primary catalysts will include any developments on the crypto market structure bill, with key groups set to convene at the White House this week to discuss the bill,” he pointed out with a knowing smile.

But alas, the price levels still hold the key!

Bitcoin Price Levels and Smart Money Suggest Rebound Is Losing Support

The Bitcoin price action confirms what the three metrics are suggesting. In order for Bitcoin to regain its former glory, several levels must be cleared:

  • $76,980: Immediate resistance from the current supply cluster
  • $79,360: Next short-term barrier
  • $84,640: Major long-term resistance tied to the largest BTC URPD zone

A sustained recovery requires clean 4-hour closes above these levels, particularly above the esteemed $84,640. Thus far, the BTC price has failed to establish strength above the first barrier, much to the chagrin of optimistic observers.

The Smart Money Index adds yet another layer of caution. This indicator, which tracks institutional-style positioning, has been trending below its signal line since late January, suggesting that larger players are not increasing their exposure in tandem with the rebound.

The last time this index briefly crossed above its signal line in late January, Bitcoin enjoyed a delightful rally of about 5%. Yet, such confirmation appears to be greatly lacking at present. Without renewed participation from the smart money, every fleeting BTC rebound may dissipate like morning mist.

Moreover, should the increased panic-driven selling, as indicated by a declining SOPR, push the BTC price downward, $72,920 shall become a critical zone. A 4-hour candle closing below this threshold may invite new downside targets into play, much to the dismay of the ever-hopeful.

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2026-02-04 11:36